Thursday, January 2, 2014

Predictions for 2014 economy? Here are five...

Predictions for 2014 economy? Here are five.

Predictions for 2014 economy are generally upbeat, with analysts seeing growing picking up and the bull market in stocks continuing. But the economy won't get back to normal in the new year, despite the positive predictions for 2014.

By , Staff writer / December 26, 2013

Trader Warren Meyers, center, works on the floor of the New York Stock Exchange in mid-December. A continuation of the bull market is one of analysts' economic predictions for 2014.

Richard Drew/AP/File

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As 2013 draws to a close, analysts across the United States are drawing up economic predictions for 2014. The precise facts and figures may vary, but there are a few general trends economists mostly agree on for the coming year:

Staff writer/editor

Schuyler Velasco is a writer and editor for the Monitor's business desk.  She writes about consumer issues, sports, and the occasional sandwich.

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1. The economy will grow faster:

US gross domestic product (GDP) expanded slowly in 2013, probably growing a paltry 1.9 percent or so when the final figures come in. Economists expect that to increase roughly a percentage point in 2014, as the fiscal drag from fiscal policies like the sequester lifts and improvement continues to be made in strengthening sectors like housing and consumer spending.  IHS Global Insight's chief economist, Nariman Behravesh, forecasts 2.6 percent GDP growth; analyst David Berson at Nationwide Economics predicts 2.7 percent growth. “Stronger growth will come from lower oil prices, improved international growth, rising household net worth, and less fiscal drag,” Mr. Berson writes in an e-mailed report.

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“The US recovery lost steam in 2013 because of massive fiscal tightening,” Mr. Behravesh writes in his own e-mailed release. “The drag from fiscal policy will probably be far less over the coming year – especially in light of the budget deal made by US Congress. This will allow the underlying strengths of the economy to become more visible.”

Though growth will be faster in 2014, it's still expected to be below the long-term trend of about 3 percent.

2. Unemployment rate will fall to near 6.5 percent:

The Federal Reserve recently lowered its US unemployment forecast for the year, projecting it to fall as low as 6.3 percent. As late as September, the Fed was projecting between 6.4 and 6.8 percent. Influenced by that rosier outlook, the Fed took its first step toward trimming its monetary stimulus efforts, cutting back on bond purchases by $10 billion.

Worldwide, however, unemployment rates in developed countries should remain high, according to Behravesh at IHS. “The unemployment rate in the advanced economies will only decline from 8.1 percent 2013 to 7.9 percent in 2014,” he writes. “Technology-driven productivity improvements in both the manufacturing and services sectors will continue to erode the demand for labor. Firms’ aggressive cost-cutting efforts will continue largely unabated in 2014, heightening pressures on many governments to implement corrective pro-employment policies.”

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3. The stock market will stall early, but annual returns will be positive:

Compared with the rest of the economy, stocks have been on a tear in 2013. The S&P jumped 25 percent, and the Dow topped 16000 for the first time. Most economists expect growth to slow in 2014, especially early in the year. David Joy, an analyst with Ameriprise Financial, expects a 10 percent correction early on, but nothing that would send the market in reverse. “Stocks will be higher in 2014, but it will be a modest year,” he says in a phone interview. “But I think the bull market will remain intact. Overseas expansion is helping, and corporations are well-positioned.”

And a correction, which many analysts anticipated as a side effect of the Fed's move to trim its stimulus, could be milder than initially thought. The stock market rallied on the Fed’s tapering announcement on Dec. 18, the Dow surged nearly 300 points, and the S&P 500 jumped 2 percent.

4. Inflation will stay low:

Most analysts expect inflation to hover at or below 2 percent, especially if energy prices remain stable. “Inflation is projected to remain low, and (importantly) below the Fed’s long-term goal of 2.0 percent for 2013,” Berson at Nationwide writes. Both total and core CPI [Consumer Price Index] should increase just a bit faster next year, but still high levels of unemployment  (even if falling) and below-trend economic growth will mean low inflation – especially in an environment where oil prices are likely to trend downward.”

5. The housing market will continue toward normal:

The US housing market is still a long way from how it looked before the crash, but it’s getting there. Prices and sales are nearing pre-bubble levels, and mortgage rates will continue to rise. Zillow.com, a housing research firm, forecasts that the average rate for a 30-year fixed mortgage will top 5 percent for the first time since 2010. Housing inventory, which remained tight through most of 2013, is growing; foreclosures and the number of homeowners behind on their mortgage payments continues to drop. “Housing, autos, and manufacturing should be the strongest sectors of the economy,” Berson writes.

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ObamaCare: Coverage killer · White House not saying how many enrolled · Bubba channels Elizabeth Warren · No aloha spirit for Hawaii Dems · Hey hoser, don’t burn the donuts, eh?

FOX News First: Jan. 2
By Chris Stirewalt
 
Buzz Cut:
·        ObamaCare: Coverage killer
·        White House not saying how many enrolled
·        Bubba channels Elizabeth Warren 
·        No aloha spirit for Hawaii Dems
·        Hey hoser, don’t burn the donuts, eh?
 
OBAMACARE MEANS NET LOSS OF POLICIES 
ObamaCare seems to have been an insurance killer so far. More than 5 million policies were nixed under the law’s new regulations. Announcing that just over 2 million people are potential paying customers is a rather stunning admission of defeat. Some of the millions may have landed on employer-based insurance and others may have become eligible under the expanded Medicaid program, but there are evidently many people who do not have coverage today because of the law. 
 
[Deadline: ObamaCare enrollees have until Jan. 10 to pay premiums for coverage retroactive to Jan. 1.]
 
WHITE HOUSE NOT SAYING HOW MANY ENROLLED 
Democrats are talking big numbers: 2.1 million applicants for ObamaCare and millions more new enrollees in the welfare program that provides free coverage to the poor, Medicaid. But the Obama administration has so far refused to disclose the number that matters: The number of people who actually have obtained insurance under the law. AP reports, “Insurers say they are receiving thousands of erroneous sign-up applications from the government, and some people who thought they had enrolled for coverage have not received confirmation. Undoubtedly, some will find out they don’t have the immediate coverage they thought they did.” A recent WSJ report revealed only half of enrollees had made their first months payment. The government is touting nearly 4 million who have been “deemed eligible” for welfare benefits, but, again, that’s not the same as enrollments. The silence so far on the real numbers is reminiscent of the quiet that fell over the administration after the enrollment period began on Oct. 1. Do they not know? Scary. Do they not want to say? Scarier.
 
‘LIE OF THE YEAR’ ADS ROLL OUT, LIKE IT OR NOT
The conservative group Americans for Prosperity announced Wednesday it is greeting three vulnerable Democrats with big ad buys in the New Year. The group is spending $2.5 million dollars to hit Sens. Kay Hagan, D-N.C., Mary Landrieu, D-La., and Jeanne Shaheen, D-N.H., for repeating President Obama’s “you can keep it” pledge, deemed  “lie of the year” by PolitiFact.
 
Spin cycle on overdrive - President Obama’s permanent campaign apparatus, Organizing for Action, has launched its own online adcampaign in an effort to share ObamaCare success stories. The White House is also ramping up its PR efforts to put the troubled health law in a more positive light. Team Obama is offering social media tools to help spread its “#GetCovered” message, including Facebook profile images and banners. They have also launched a new section on the White House Web site encouraging visitors to submit their own health care success stories. 
 
THE HIGH PRICE OF POLITICAL IGNORANCE
George Will considers the consequences of a uniformed electorate inThe price of political ignorance: More government. “Political ignorance helps explain Americans’ perpetual disappointment with politicians generally, and presidents especially, to whom voters unrealistically attribute abilities to control events. The elections of 1932 and 1980 dramatically illustrated how voters primarily control politicians — by ‘retrospective voting,’ refusing to reelect them.”
 
[LAT’s Mark Z. Barabak considers how “throw the bums out” so often results in the bums staying exactly where they are.]
 
PICK SIX: YOUR MIDTERM PREDICTIONS
With control of the Senate within reach of the GOP this year, we asked you to play pundit and give us your six picks for the most likely Republican path to a Senate majority. The consensus: Arkansas Democrat Mark Pryor is toast. But beyond that, most of you forecast additional GOP pickups in Alaska, Louisiana, Montana, South Dakota and West Virginia.   
 
Many of you added your thoughts on how the GOP might get there: “Republicans have to get their ground game to work. They need to message themselves as pro-freedom, pro-liberty, and pro-America with real solutions to the failed policies of the past 5 years,” wrote Daniel Seiler. “They have the upper hand, because they have the argument. They just have to be disciplined enough to get it.”
 
It’s not too late to have your say! Email your six picks – just a list of postal abbreviations will do – to FOXNEWSFIRST@FOXNEWS.COM or tweet to @cstirewalt.
 
DEMS DRUMMING UP SUPPORT FOR JOBLESS BENEFITS
Sen. Majority Leader Harry Reid says the Senate’s first order of business will be to resume federal subsidies for extended unemployment benefits when it reconvenes on Monday. Reid told the AP Wednesday the Senate will take up a bipartisan measure from Sens. Dean Heller. R-Nev., andJack Reed, D-R.I., that extends unemployment benefits for three months. Fox News has more.  
 
[Washington Examiner’s David Freddoso makes the case against extending unemployment benefits. “In a market with few good jobs available and long-term unemployment benefits, it was rational for earnest job-seekers to hold out for something better than what was there. But when the issue is forced, some job is better than no job at all.”]
 
Reid’s jobs plan includes keeping his own - The Hill reports that Reid’s play on restoring extended payments for the unemployed could be a particular boon to some embattled members of his conference, Sen.Mark Pryor, D-Ark., and Sen. Kay Hagan, D-N.C, both represent states with higher-than-average unemployment.
 
WITH YOUR SECOND CUP OF COFFEE...
Graham Allison, the director of the Harvard Kennedy School’s Belfer Center for Science and International Affairs, poses an uncomfortable question for 2014: Is the stage set for a large-scale war? Not likely, he says, but points out that we’ve thought that before. “Precisely a hundred years ago [Wednesday], the richest man in the world sent New Year’s greetings to a thousand of the most influential leaders in the U.S. and Europe announcing: mission accomplished. ‘International Peace,’ he proclaimed, ‘is to prevail through the Great Powers agreeing to settle their disputes by International Law, the pen thus proving mightier than the sword.’” We know how that turned out, Mr. Carnegie. Read it all fromCommentary.
 
Got a TIP from the RIGHT or LEFT? EmailFoxNewsFirst@FOXNEWS.COM
 
POLL CHECK
Real Clear Politics Averages
Obama Job Approval: Approve – 42.6 percent//Disapprove – 53.4 percent
Direction of Country: Right Direction – 30.1 percent//Wrong Track – 63.3 percent 
Generic Congressional Ballot:  Democrats – 43.3 percent// Republicans 43.1 percent 
 
BUBBA CHANNELS ELIZABETH WARREN 
In his remarks at the swearing in of New York’s new Mayor Bill de Blasio, former President Bill Clinton wasn’t looking for any Third Way out. The event featured an invocation that deemed New York a “plantation” and was focused on de Blasio’s call for “a new progressive direction” and big tax hikes on top earners. Clinton said he “strongly endorse[d]” de Blasio’s platform and called the gap between rich and poor in New York a “moral outrage.” Former first lady Hillary Clinton did not speak, but the enthusiastic endorsement by her husband, widely distrusted by the Democratic left as too good a friend of Wall Street, might go even farther in quelling anxieties from those still hoping a liberal challenger will emerge to the party’s 2016 frontrunner. “I have to say I strongly endorse Bill de Blasio’s core campaign commitment to shared opportunities,” the former president, said. “And this inequality problem bedevils the entire country.”

Did they try stopping and frisking? - New York Mayor Bill de Blasiotook the oath on the same Bible used by fellow New Yorker Franklin Roosevelt in his 1933 presidential inauguration. But when the ceremony ended, the Good Book was gone. A massive search, that included sifting through garbage, ended when a NYPD detective uncovered the Bible. NY Post has the story. 
 
NO ALOHA SPIRIT FOR HAWAII DEMS 
A bitter Senate primary is shaping up in President Obama’s home state. Gov. Neil Abercrombie’s, D-Hawaii, appointed former Lt. Gov. Brian Schatz to fill the seat of the late Sen. Daniel Inouye, D-Hawaii, even though Inouye had made clear before his death in December 2012 that he wanted Rep. Colleen Hanabusa, D-Hawaii, to get the gig. Now, Hanabusa is giving up her House seat to challenge Schatz, who has won the endorsements of former New York Mayor Michael Bloomberg and former Vice President Al Gore. Bloomberg is headlining a fundraiser for Schatz today. Hanabusa was a stalwart for Hillary Clinton, while Schatz was an early booster for Obama.  Abercrombie didn’t help calm things inhis interview with WaPo’s Philip Rucker:  Abercrombie said he disagreed with Inouye’s wishes, adding that he didn’t want to ‘get into a discussion about letters and deathbed notices.’ The governor said he thought Hanabusa, now 62, was too old to build enough seniority in the Senate to continue Inouye’s legacy of steering an outsize allowance of federal money to Hawaii. Noting that Inouye entered the Senate in 1963 at age 38, Abercrombie said: ‘Brian Schatz is 41. Colleen isn’t. She’s in her 60s.’” If the acrimony deepens, Republicans might actually have a chance in the Aloha State, with former Rep. Charles Djou ready for action.

MORE RUMBLINGS ON SPRINGTIME IMMIGRATION PUSH 
NYT: “Speaker John A. Boehner of Ohio has signaled he may embrace a series of limited changes to the nation’s immigration laws in the coming months, giving advocates for change new hope that 2014 might be the year that a bitterly divided Congress reaches a political compromise to overhaul the sprawling system.”
 
Yes, but… - This sounds like the NYT playing some catch up here. The odds of Boehner doing anything like “comprehensive” immigration changes look low indeed. How many anonymous sources in stories like these are just looking to divide GOPers. And how much of this is Boehner playing for time with big business groups demanding action on conditional amnesty for illegals?
 
SIX CALIFORNIAS 
Is California so large it has become ungovernable? That’s the conclusion of venture capitalist Tim Draper. Draper’s solution: create six states out of the Golden State. According to the venture capitalist’s proposed ballot initiative, new states known as Silicon Valley and West California would be anchored by the cities of San Francisco and Los Angeles, respectively. South California would include Orange County and San Diego. Remaining counties would be divided into areas called Central California, North California and Jefferson. The proposal contends that the sheer size of the state creates problems for governance, its costly media markets make elections expensive, and the competing interests of coastal and inland regions promote policies that only favor certain areas. 
 
[Walter Russell Mead likes it: “We may disagree with the boundaries somewhat, but the idea is a sound one—indeed, it’s potentially one of the most important US reform possibilities out there.”]
  
ROB FORD GOING TO HIT IT AGAIN 
Toronto Mayor Rob Ford, who gained notoriety in 2013 for his past affinity for crack use and his unruly antics, may be grabbing headlines again in 2014. Fox News’ John Roberts got the scoop that Ford will seek re-election this year. Ford files today. Voters in Toronto will elect their next mayor Oct. 27. Toronto’s The Star has more. 
 
HEY HOSER, DON’T BURN THE DONUTS, EH  
Two men driving through a remote mountainous section of Alberta, Canada resorted to some unorthodox methods to keep warm when their car became stranded. The Calgary Sun reports that with temperatures dropping to 5 degrees, the two removed the seats of the Honda and lit them on fire to provide warmth, later deciding to torch the entire car. In the morning, they realized they were in easy walking distance to a home. That’s where police found them after passersby reported the smoke plume from their roadside pyres. The duo was treated for minor burns and frostbite. And it turns out both men were in possession of cell phones. The sage advice from the Mounties: “We certainly don't recommend lighting your vehicle on fire to stay warm," Royal Canadian Mounted Police Cpl. Jeffrey Feist said. “Stay inside your vehicle and call 911 if you can.”
 
AND NOW A WORD FROM CHARLES…
“Obama’s active agenda is dead on arrival. His polling numbers are going to hover around 40. With that, if you are a lame duck, you only hold one of the two houses, you are not going to get any run on that agenda. I do think it will be one of the great ironies that it will be Senate Democrats who drive the stake through ObamaCare’s historic repudiation of liberals of their own singular achievement. ”—Charles Krauthammer, on “Special Report with Bret Baier.”
 
Chris Stirewalt is digital politics editor for Fox News. Want FOX News First in your inbox every day? Sign up here. To catch Chris live online daily at 11:30 a.m. ET, click here.
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More New Taxes and Fees: How You’ll Pay for Obamacare in 2014...BOHICA ALERT!

More New Taxes and Fees: How You’ll Pay for Obamacare in 2014

01/02/2014

Obamacare contains 18 specific tax hikes, mandates, or penalties that cost Americans money, and three new ones take effect in 2014. This is only the beginning—watch how two of these taxes get worse in the years to come.

1. Individual Mandate Tax. The individual mandate is designed to strong-arm individuals into purchasing government-approved health insurance or facing a tax penalty. In 2014, the penalty for not purchasing insurance will be either $95 or 1 percent of annual income (whichever is greater). Very few, if any, people will end up paying just $95, because individuals with an annual income of only $9,500 or less would likely qualify for Medicaid or a hardship exemption from the mandate. The mandate increases drastically in coming years, rising to $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016—whichever is greater.

2. Health Insurer Tax. One of the largest tax increases in the law is an annual fee imposed on health insurers based on their share of the market. It is estimated to raise $8 billion in 2014 alone. The tax will more than likely be passed on to consumers through premium increases. An actuarial analysis by the consulting firm Oliver Wyman projects that in 2014, this tax will increase premiums by 1.9 percent to 2.3 percent. And the impact will be greater in later years as the tax increases.

3. Reinsurance Fee. This fee isn’t included in the list of 18 tax hikes, but it’s another one that will impact the cost of insurance. Health insurers will have to pay the temporary fee on group health plans to help spread the cost of the covering those in the individual market, inside and outside Obamacare’s exchanges. The fee begins in 2014, costing $63 per covered person and decreasing in 2015 and 2016. Like most taxes and fees, the result will likely be higher insurance premiums.

Sneak Peek at 2015: Employer Mandate. By law, the employer mandate was supposed to begin in 2014, but the Obama Administration delayed enforcing it until 2015. The employer mandate forces employers with 50 or more full-time employees (defined as those working 30 hours per week) to offer government-approved health coverage or pay a penalty. The penalty varies—either $2,000 per employee after the first 30 workers, or $3,000 per employee receiving subsidized coverage in the exchange, whichever is less.

Regardless of the delay, many businesses have already adapted by reducing hours for their employees—falling under the threshold to avoid both the cost of coverage and the penalty.

We need health reform that works for Americans—not against them. Learn more.

Read the Morning Bell and more en español every day at Heritage Libertad.

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