In 2014, look for continued slow growth, low interest rates

In 2014, look for continued slow growth, low interest rates

Economists interviewed by WalletHub predict that the economy will continue its slow growth in 2014, with GDP rising to 3 percent and unemployment dropping below 7 percent. Other predictions:

The stock market will be solid, but volatile. Some experts forecast continued growth next year, but others expect a significant correction.

I am pretty confident that we are going to see a drop in the averages, Thomas Smith, assistant professor of finance at Emory University, told WalletHub. If this happens, we could see a drop in other sectors and the start of a little recession.

Interest rates for mortgages, car loans and credit cards will stay low. Rates should remain low because of both record-low credit losses and the Federal Reserve Boards commitment to continue current policies until the economy is on more solid footing.

Gas will cost less. The U.S. Energy Information Administration projects that retail gasoline will average $3.37 per gallon in 2014, down from $3.50 this year and $3.63 in 2012. The main reason is the huge increase in natural gas drilling.

There is an estimate that this increase in new production added $1,200 to the average household income last year, said Shawkat Hammoudeh, professor of economics and international business at Drexel University.

Congress will be on better behavior, but wont learn its lesson. Both parties are anxious to avoid another government shutdown, experts say. An election year could make members slightly more willing to cooperate, but there are still many extremists on both sides.

The health care law will continue to be a major point of contention. Health care reform, energy regulation and financial market regulation are negative value propositions, making productivity lower and limiting investment, John Garen, professor of economics at the University of Kentucky, told WalletHub. This is unlikely to change for 2014.”