The US economy is poised for its best performance in five years.

Economists describe an economy that will be "solid," "sustainable," and "entering the new year with a wonderful head of steam."

If the optimistic forecasts are accurate, it will mean more Americans find jobs in 2004 - something that has been more difficult this year. A stronger economy could also help lower the federal budget deficit, as government coffers grow from stronger tax collections and fewer unemployment payments. Altogether, it could help President Bush in his reelection bid.

"The economic expansion finally looks secure," says Bill Dudley, chief economist for Goldman Sachs & Co. in New York. "We are a lot more optimistic compared to the last few years."

Behind the optimism is a stronger world economy, which will help absorb some of the production that has ended up in US ports. At the same time, US corporations are in better shape and are starting to spend more money on new products and factories. And, as company balance sheets improve, the stock market may continue its bullish ways - engendering yet more confidence. Just on Monday, in fact, the Nasdaq closed above 2000 for the first time in nearly two years.

With these factors in play, economists anticipate the nation's gross domestic product will top 4 percent growth next year. That's compared with 3 percent this year, 2.5 percent in 2002, and no growth in 2001, a recession year. But in the second half of 2004, some economists, such as Mr. Dudley, expect the economy to slow slightly - perhaps to a 3 percent growth rate - as some of the tax-cut stimulus wears off.

Still, the stronger growth will add about 1 million new jobs to the US economy, estimates Mark Zandi of Economy.com, an economic website. This will help to recoup some of the 2.4 million jobs that have been lost since February 2001, when unemployment started moving up. If things go well, "we'll get half those jobs back," says Mr. Zandi, who adds that there are still 8 million unemployed workers.

Yet despite some improvement already in the jobs picture, employment continues to be a key concern for many Americans. Some analysts predict only moderate gains in hiring.

When considering other factors, economists see a few possible clouds on the horizon. "A substantial terrorist hit would jolt things [and] be a serious risk to the economy," says David Kotok, chief investment officer at Cumberland Advisors Inc. in Vineland, N.J. "The security apparatus - the Department of Home- land Security, which is already gigantic - would double in size," says Mr. Kotok, who is otherwise very upbeat on the economy.

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