The new year is here, and knowing what's in store for jobs, prices and interest rates can help you plan your family's finances for 1993. Here's what the experts at Kiplinger's Personal Finance Magazine predict:
- JOBS. The economy's pace should accelerate as the year progresses, but the recovery won't be strong enough to loosen up the tight job market. The unemployment rate will remain at about 7.5 percent.Harder work, faster computers and better telecommunications will make it easier for companies to generate more goods and services without adding employees.
On average, pay raises in 1993 will beat inflation, leading to more real, spendable income.
A survey of 2,100 employers by the consulting firm Towers Perrin finds that professional, technical and managerial salaries should increase 4.5 percent to 5 percent.
- PRICES. The consumer price index (CPI) will move only a bit above its 1992 rate of about 3.2 percent.
As incomes rise, the pressure on supermarkets to cut prices to the bone will wane, so look for your food bill to rise another 2 percent in 1993. Meat may get cheaper.
Deals abound for clothing, with too many stores vying for too few shoppers. Computer prices are down at least 15 percent and the floor's the limit. A 27-inch television that sold for $700 a year ago can be had for $499.
The wild cards are fuel and utilities. Unless the United States is blessed with another warm winter and a mild summer, we could be in for a shock.
Natural-gas prices rose faster after Hurricane Andrew because of damage to gas platforms in the Gulf of Mexico. Local gas-utility rates could soar 15 percent to 25 percent.
Heating oil is up, too, and water bills are in the early stages of a multiyear rise because of high costs for water-quality improvements required by the Safe Drinking Water Act.
- INTEREST RATES. Borrowers can still benefit from low rates. Long-term interest rates will increase only a half-point to a point. That means 30-year fixed-rate mortgages are headed toward 8.5 percent, with some periods when they'll pass 9 percent.
Short-term interest rates will rebound to 4 percent from the recent 3 percent level.