The New Year's Bundle Of Jitters

Profits will flatten out but growth should continue, albeit at a slower rate

The U.S. economy hit some heavy turbulence in 1998--and made it through unscathed. Despite the Asian crisis, crumbling exports, sagging manufacturing, falling profits, the Russian debt default, and a Long-Term Capital Management debacle that threatened the U.S. financial system, the economy didn't miss a beat. When all the data are in, the U.S. is expected to have grown at a stellar pace of at least 3.5% for the third year in a row--with low inflation. And after Wall Street's nosedive this summer, the markets have rebounded.

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