What to look for in 1994:
- Overall, 1994 will be a better year than 1993, with growth averaging between 3 percent and 3.5 percent.- But the economy will cool down from the fourth quarter of 1993, which may have had a growth rate of well over 4 percent.
- Short-term interest rates will go up a notch as the Federal Reserve Board takes no chances on inflation.
- The unemployment rate will remain over 6 percent.
- Job opportunities for college graduates will improve in 1994. Computer science majors will be in great demand, but liberal arts majors will have to scramble.
- Congress will approve major reforms in the nation's health-care system and President Clinton will sign the legislation, even though it won't resemble his original proposal.
- After much debate, welfare reform will be put off until 1995.
- Home sales will be the best since 1978. Car sales will expand substantially over 1993. General Motors will make money again and grab a larger share of the domestic market.
- Slow economic growth in Japan and Western Europe will continue to hurt the market for U.S. exports.
- Social Security benefits will rise 2.6 percent to keep pace with the cost of living. The average monthly benefit for an aged couple, both receiving benefits, will be $1,140. The average for a widow will be $631. Workers will pay the 6.20 percent Social Security tax on the first $60,600 of salaries and wages in 1994. They'll pay the 1.45 percent Medicare tax on all salaries and wages.
- A baseball player will stop charging for autographs, saying he already has more money than he needs.
- The Dow Jones Industrial Average will crack the 4000 barrier, then fall back into the 3900 range by the end of the year.
- The U.S. Postal Service will announce its intention to raise postage rates. To cover rising expenses, the price of a first-class stamp will jump from 29 cents to 32 cents in 1995.
- Single taxpayers will pay a 36 percent tax rate on taxable income over $115,000 and married taxpayers will pay a 36 percent rate on taxable income over $140,000 when they file their 1993 income tax returns. The old top rate was 31 percent.
- Single retirees with incomes over $34,000 and married retirees with incomes over $44,000 will pay higher taxes on their Social Security benefits, beginning in 1994.