Consumerscope: Slow Growth Expected for 2013
Despite being another year removed from recession, in many ways the economy was worse in 2012 than it was in 2011. Economic growth as measured by GDP was roughly 1.6 percent in 2012 after growing two percent in 2011. The economy continues to sludge through the lackluster economic recovery.
Last year in this column, I wrote that 2011 “was mired by uncertainty, first with political unrest in North Africa and the Middle East followed by recessionary concerns in the U.S. and fiscal uncertainties in the Eurozone. I expect uncertainty to linger throughout 2012.” This year was certainly defined by uncertainties. Political unrest escalated in the Middle East and North Africa. The Eurozone uncertainties have been subdued in recent months, but it remains in need of a political solution where no political solution can be had, and I expect these uncertainties will again flare up in 2013. After dealing with uncertainties around the U.S. election, the focus within the U.S. shifted immediately to our own fiscal uncertainties regarding the fiscal cliff.
Other unexpected events also surfaced in the U.S. in 2012. The summer drought reduced GDP growth in 2012 by roughly three-tenths. Hurricane Sandy cut three-fourths of a percentage point off of GDP growth in the fourth quarter, and uncertainties around the fiscal cliff curtailed investment in the back half of 2012.