The combination of slower-than-expected job gains, with what is anticipated to be a horrendous year for energy and oil prices, has resulted in many forecasters now predicting slower growth in the economy in 2004 than they had initially presumed heading into this year. A lack of significant job growth will keep the Federal Reserve in check for much, if not all, of this year in regard to short-term interest rates.

The price of gasoline is expected to escalate significantly this summer to levels that we have never seen in this country. The hikes in gas prices will have an impact on consumersí wallets and could curtail long-term travel and vacation plans this summer. It is widely forecast that by mid-summer, the average price of gasoline in the United States will rise in excess of $2.00 per gallon, but we can expect to see higher rates in metropolitan areas such as Los Angeles, Chicago and New York, where prices may escalate to nearly $3.00 per gallon. As is the case in most calendar years, prices will ease at the end of the summer and continue to drop in the fall. Eventually this will impact airline prices as well, as their bottom lines will also be affected by the increase in oil prices.

Speaking of air travel, competition is brewing once again amongst the airlines, which spells good news for consumers. Expect to see a new rash of airfare wars, as well as improved service. Frequent flyer programs that tightened up in recent years should start to loosen again as the airlines begin to compete for the consumersí dollars. Many of the new upstart airlines are expected to start hitting more locations. ATA plans to fly to Europe, Spirit is eyeing service in Latin America, Frontier Airlines intends to begin flight patterns into Mexico, and Jet Blue has already extended their service with flights to the Caribbean.

Consumers can also expect to see the development of a hierarchy in air travel in the years ahead. Currently, we can select from Business Class, First Class, and Economy as price options, but there truly isnít a significant difference from one airline to the next to justify the dramatic prices ranges we see when comparing rates. Letís make a comparison using hotel chains as an example. A consumer truly knows what they will get for their money if they choose to stay at a Four Seasons Hotel as opposed to a Best Western facility. The difference in price and the amenities that come with the high ticket room is clearly evident. But when you look in the newspapers, Delta Airlines may be running a half-price special for the same flight that is offered by American Airlines, with no significant difference between what you get in the way of service, leg room, food quality, etc. This is expected to change in the future, with airlines becoming much more finite in the type of business model they practice. Some companies will emerge as the ìFour Seasons of Airlines,î if you will, and the consumer will have to pay dearly for it. We have already started to see this trend with a lot of the major airlines coming out with their own discount carriers in an effort to compete with the successful business models of Jet Blue and Southwest.

Refinancing your home can affect your taxes! There are special deductions for points that can be lost if you are not changing to a new lender. When you refinance for the first time, you must deduct any points that you pay on a prorated basis over the life of the loan. On any subsequent refinance of that mortgage you just paid points on, you are allowed to deduct the points left over from that previous mortgage. The IRS says that if you refinance with the same lender, you must disburse the remaining points over the term of the new loan. This makes refinancing with the same lender not as attractive as switching lenders.

Interest rates will eventually rise, which may be very problematic to the holders of treasury bonds, but not nearly as bad for investors who hold fixed income instruments known as Mortgage-Backed Securities. When rates go up, the value of these securities tend to hold up better than other fixed income securities, because the risk that homeowners will refinance and pay off their loans early decreases dramatically. The TCW Galileo Total Return Bond Fund invests in a blend of securities issued by both Fannie Mae and Freddie Mac, and those that are guaranteed by Ginnie Mae. This may be something that you would want to take a look at to protect your investments and diversify your portfolio!