NEW YORK -- The U.S. economy in 2005 is entering a new cycle of prosperity that may be more efficient -- and thus more sustainable -- than that of the mid-1990s, according to Diane Swonk, chief economist for Mesirow Financial, at the firm's first annual Economic Outlook and Forum.
"I expect inflation will continue to abate, aided by lower oil prices, increased productive capacity and the ongoing push to lower unit labor costs," Swonk said. "Interest rates are expected to rise, but still remain near historic lows. The U.S. dollar will remain weak and foreigners will be more willing to hold dollar-denominated assets once the returns associated with higher productivity growth begin to work their way through the system."
