Economic growth - After a rough first half of the year, when GDP grew at an annual pace of under 2 percent, growth in the third quarter accelerated to 3.1 percent. Economic expansion has downshifted to 1.5 to 2 percent in the final months of the year, bringing total growth for the year to roughly two percent, slightly ahead of 2011's anemic 1.8 percent.
Because of the drag created by the likely pull-back in government spending, 2013 is not likely to see a big improvement. Economists predict growth of 2 to 2.5 percent. That's lower than the long-term, post-World War II rate of growth in the U.S. of 3.3 percent. The early part of the year could be tough, but the economy should gain steam as the year progresses. Research firm Macroeconomic Advisers expects growth of nearly 2 percent over the first half of 2013, with GDP hitting 3 percent over the second half and 3.2 percent in 2014."
Housing - One positive trend for 2013 is likely to be the continued recovery in housing. The problem child of the Great Recession finally bottomed in 2012. Existing home sales this year are on track to finish the year up 15 percent, while the number of properties on the market has plunged nearly 25 percent year-over-year. New home sales are on pace to increase 18 percent, while the closely watched Case-Shiller house price indexes will probably be up around 6 percent for the year. There is a long way to go when it comes to housing -- prices are still down approximately 30 percent from their peak. But after five years of housing acting as a drag on the economy, it has finally started to contribute to overall growth.
Jobs - As housing and the general economy pick up, the hope is that job creation follows. The final jobs report of the year will be released on Friday. Economists forecast that the economy created roughly 150,000 and that the unemployment rate will remain at 7.7 percent. Through November, the economy has added an average of 151,000 jobs per month, compared with 153,000 in 2011. After creating a total of roughly 2 million private-sector jobs in 2011 and 2012, it is amazing to consider that there are still 3.3 million fewer private sector jobs now than when the recession started in 2007 (including the preliminary benchmark revision).
In 2013, average monthly job growth should increase slightly to 165,000, with an annual average unemployment rate of 7.7 percent, according to a survey by the National Association of Business Economics. Wages and benefits also are expected to accelerate slightly next year, which could boost spending. CBS Moneywatch
