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Economy Poised to Nudge Ahead in 2013

Wall Street Journal (12/17/12) Ben Casselman; Phil Izzo

The U.S. economy appears to be turning a page, with 2013 the start of a more normal, though hardly robust, period of growth. Although the risk of another recession is diminishing—assuming leaders in Washington can steer clear of the fiscal cliff—so are the prospects for a period of rapid growth that brings down the unemployment rate and helps the economy make up the ground lost in the recession.

Economists surveyed by the Wall Street Journal put the odds of a recession next year at just 24%, closely aligned with the odds—26%—that the economists put on a standoff that takes the nation over the fiscal cliff. Get past the cliff, and most economists expect reasonably solid growth.

Economists forecast the chances of greater than 3% growth next year are about 24%. In general they anticipate growth of 2.3% in 2013, slightly better than the 1.9% growth they think the U.S. achieved this year, but not enough to be of much help for the nation’s 12 million job seekers. The economists expect the unemployment rate to decline to just 7.5% by the end of 2013, from 7.7% today.