U.S. economy looking up in 2004

The U.S. economy is set to grow at its fastest rate in 20 years, according to a report released by the New-York-based Conference Board. The report attributes the growth to the economy’s strong year-end finish in 2003 and increased profits and productivity, which lead to more business spending.

Gross domestic product could hit 5.7% in 2004, a 2.6% increase over 2003’s 3.1% growth rate. With profits on the rise, businesses are predicted to spend heftily on capitol improvements in 2004. Real capitol spending will be up 11.7% compared to an estimated 2.7% in 2003.

However, the job market isn’t likely to see such dramatic increases. The unemployment rate is expected to drop slightly from 6.0% in 2003 to 5.6% in 2004. Some economists attribute this sluggish increase to dramatic productivity gains, which enable fewer workers to do as much or more work than before.