U.S. economic outlook: is this finally 'next year'?

• Author: Barkey, Patrick M.
• Position: Statistical data

The Federal Reserve Bank does not make an official forecast of the U.S. economy. But its 12 regional banks around the country do. And for three years running, the median of those 12 forecasts has said the same thing--sluggish growth this year, better growth next year. But each year in this sluggish recovery, the goalposts are moved back and we must again wait for better growth "next year."

Has "next year" finally arrived in 2014? There are promising signs. Business confidence is solidifying, hiring has been durable, and profits and cash on hand for businesses are plentiful. Households have been steadily shedding debt. The economy had growth above 4 percent in the third quarter of 2013.

But 2014 will also be the year that the Federal Reserve eases back on the throttle of bond buying with printed money. Will those headwinds prevail? Here are the top 10 things to expect for the national and global economies this year, courtesy of forecasting firm IHS Global Insight:

1. U.S. growth will slowly speed up. Thanks to tax increases and sequestration, 2013 growth was in check. Expect less fiscal headwinds and faster growth.

2. The European recovery will proceed, but at a very sluggish pace. The good news for Europe is that its trajectory will be upward. The bad news is that is isn't very strong.

3. China's growth rate will be sustained. Expect the second largest economy to stabilize its growth at around 8 percent this year, instead of continuing to decelerate as once feared.

4. Other emerging markets will perform a little better. Better export markets will help stabilize falling growth rates in once high-flying developing economies.

5. Unemployment rates in the developed world will remain high. Labor markets in Europe especially will remain at very elevated levels, while jobless rates in the U.S. continue to decline.

6. Commodity prices will go nowhere and inflation will remain a low-level threat. As developing counties stabilize, demand for commodities will strengthen slightly, while excess capacity continues to short circuit general inflation fears.

7. The Federal Reserve will start scaling back its stimulus, while other central banks will likely wait or provide more stimulus. The U.S. and the U.K. will be out of the gate first in unwinding stimulus, while Europe may go in the opposite direction.

8. Fiscal headwinds will ease. Federal budget deficit...