The U.S. economy's performance in 2004 is expected to be one of its very best. Real GDP growth will easily top 4%, up from 3% last year, 2.5% in 2002, and no growth during the 2001 recession year.
Stronger production will prompt more hiring, with job growth accelerating throughout the year. The unemployment rate will not decline meaningfully until later in the year, however, as currently discouraged workers are enticed to resume looking for work by the strengthening job market.
With still substantial unemployment and low, albeit rising, manufacturing utilization rates, inflation will remain subdued this year. Core consumer price inflation is expected to remain well below 2%.
Continued substantial fiscal and monetary stimulus will ...