News on Costs: Not So Bad.

Business cost hikes will be more tolerable next year, according to The Kiplinger Letter which has offered projections on a series of routine expenses for 2001. Energy costs, which spiked this year, will be lower, Kiplinger says, though health care costs will be up considerably. Overall inflation is projected at just 2.8%.

Kiplinger's forecast of a 12 percent boost in health care costs is matched by Watson Wyatt Worldwide, which is projecting a 12.2 percent hike for overall medical costs for active employees. The consulting firm based its projection on a survey of 61 companies with 1.7 million employees, done in conjunction with the Washington Business Group on Health.

But Watson Wyatt predicts that prescription drug benefit costs borne by large employers will jump 22.5 percent for active employees and 23.4 percent for Medicare retirees in the year ending in mid-2001. It blames "introduction of expensive new medicines, the aging of the population and the aggressive direct-to-consumer marketing that stimulates patient demand."

Separately, Runzheimer International reported that its Domestic Travel Price Index rose just 3 percent, to 205.6, for the year ending June 30 -- and actually fell 1.2 percent in the second quarter. Runzheimer's travel index, which is pegged to 1988 costs, represents a weighted average of airfare, lodging, meals and car rentals.