The pace of the U.S. economic recovery will pick up next year, although growth will remain tepid for some time to come, according to a panel of economists polled by The Associated Press this week.
Analysts do not expect unemployment to fall below its current level of 8.6 percent for most of 2012, and without significant job creation and wage growth markets, will remain mired by weak consumer activity, which accounts for roughly two-thirds of the economy. November's jobless rate plummeted from 9 percent the month before.
The surveyed economists expect U.S. economic growth to reach 2.4 percent next year, slightly higher than the 2 percent projected for 2011. Expansion will also be checked by a recession in Europe, as analysts project a 2011 contraction of 0.5 percent on the other side of the Atlantic.
"Europe is slowing as heavily indebted countries slash spending and banks exposed to government debt curtail lending," report Derek Kravitz and Paul Wiseman for the AP. "Among the gravest fears is that a major country like Italy will default on its debt, wiping out some banks with large holdings of European government bonds."
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Posted: 12/27/2011