The US economy is gaining momentum and should push through next year with only a few bruises despite an almost certain European recession and slower global growth.
A firming in the US labour market should put the economy in reasonable shape to withstand headwinds from overseas, although the recovery will likely slow at the start of the year after a surprisingly solid fourth quarter.
“The US economy will be one of the better stories in an otherwise gloomy global economy next year,” said Sung Won Sohn, an economics professor at California State University in the Channel Islands. “It will not go into recession.”
Data from employment to manufacturing imply the growth will top a 3% annual rate in the fourth quarter, which would be the fastest pace in 18 months.
The jobless rate fell to a two and a half year low of 8.6% in November and first-time claims for jobless benefits have dropped to the lowest level since early 2008.
That’s good news for the consumers who drive two-thirds of US economic activity.
“The consumer is going to be able to spend simply because job growth is picking up,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “As job growth picks up, income picks up.”
Many economists now look for growth of between 2.3% and 3% in 2012, even given the clouds overseas.