EconomicCrisis.US

The US economy grew at the fastest pace in a year and a half in the fourth quarter of 2011, the Commerce Department said on Friday.

The encouraging acceleration ended the year with a positive note, but failed to dispel uncertainties about the economic outlook.

Gross domestic product, the value of all goods and services produced, rose at an annual rate of 2.8 percent in the fourth quarter, the department said in a preliminary report.

It is a considerable increase from the revised 1.8 percent in the third quarter, but still fell short of the economists’ wide expectation of 3 percent, Xinhua reported.
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The European debt crisis threatens to spill over to the U.S. and emerging markets, requiring a bigger financial firewall, more bank recapitalization and limits on bank deleveraging, the International Monetary Fund said.

While European policy makers have taken steps to contain the crisis, it still poses risks to U.S. stability and may spread to emerging markets beyond central and Eastern Europe, the IMF said. The U.S. in particular is at risk, including the direct exposure of banks, according to the IMF.
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U.S. consumer prices were flat for a second straight month in December as gasoline fell and food rose moderately, government data showed on Thursday, suggesting scope for further monetary easing should economic growth falter.

The Labor Department said its Consumer Price Index was unchanged. Economists polled by Reuters had expected prices to edge up 0.1%.

Core CPI – excluding food and energy — inched up 0.1% after rising up 0.2% in November. That was in line with economists’ expectations.

Although growth gained pace in the fourth-quarter, the recovery is expected to lose a step in the first half of this year mostly due to the debt crisis in Europe, which is already impacting on exports.
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While business and consumer spending are helping revive the U.S. economy, less than 10 percent of metropolitan areas have recouped all the jobs lost during the recession that ended in 2009, a report found.

Only 26 of the nation’s 363 metropolitan areas have seen employment rebound to pre-recession peaks, according to the report, prepared by forecaster IHS Global Insight and released by the U.S. Conference of Mayors today. Nearly 80 areas aren’t expected to see such a recovery for more than five years.
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