updated 1/2/2004 8:36:09 AM ET 2004-01-02T13:36:09

Companies are expected to step up hiring in 2004 after a year in which household spending boosted the economy more than business investment, according to a group of economists surveyed by The Wall Street Journal.

Major Market Indices

The 54 economists surveyed for the Journal's 2004 economic-forecast report said they thought the unemployment rate could fall to 5.5 percent by November.

Hiring fueled by increasing corporate profits and economic growth could lead to as many as 1.5 million new jobs, the Journal said.

Though they did not predict a boom, the respondents said they expected the recovery to continue, with strong growth in the first part of the year expected to slow toward the year's end.

"The economy will be producing a message that employment is growing at a pretty good pace, but not booming," Richard Rippe, chief economist at Prudential Equity Group Inc., told the Journal.

Real gross product was expected to grow at an annual rate of 4.5 percent in the first quarter, 4.3 percent in the second quarter and 4 percent in the second half of the year, the economists said.

Half of the respondents said they thought the Dow Jones Industrial Average could exceed 11000 by year end, and 93 percent said they had increased the amount they had personally invested in the stock market in the past year.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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