Jeff Thredgold">

Economic outlook for '12

Published: Friday, Dec. 2 2011 4:27 p.m. MST

The U.S. economy Next » 1 of 8 « Prev
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What we now call the Great Recession officially began in December 2007 and ended in June 2009. It was the longest, the deepest and the most painful recession since the Great Depression.

By my count, that suggests that the current U.S. economic expansion is now reaching the two-and-a-half year mark. The current expansion has been less than satisfying both statistically and emotionally, with major headwinds still in play involving weak residential and commercial real estate markets, uncomfortably high unemployment, major European financial risk, and elevated levels of anxiety about the direction of the federal government.

The current U.S. economic expansion has been especially lackluster when considering the massive and unprecedented levels of both fiscal and monetary stimulus. While modest economic growth has returned, a "recession of confidence" remains center stage.

Economic growth in the new year about to unfold is likely to remain substandard, with most forecasts congregating around a 1.5 percent to 2.5 percent real (inflation adjusted) rate of growth. More bearish forecasters see particularly anemic growth in 2012's first half.

The size and scope of a possible European financial implosion could lead the United States and much of the world back into recession, although that is not the consensus view. Nevertheless, investors around the globe have taken a "shoot first, ask questions later" approach to European sovereign (national) debt markets and the contagion that has now spread to more and more members of the euro community.
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