A poll conducted by the Associated Press (AP) shows almost two-thirds of Americans believe 2012 will be better than 2011. The study revealed that 62 per cent are optimistic about what 2012 will bring for their country, and 78 per cent believe 2012 will bring better times for their family. Over two-thirds of those polled described 2011 as a poor year. Many said they are glad to see the back of 2011 because of the poor economy. Jobs were hard to come by and prices for things like healthcare, food and fuel continued to rise. South Carolina resident Mary Burke told the AP she had lost faith in Washington politics, saying: “They don't care about me and you. They only care about how they are going to line their pockets."
The year 2011 was a momentous one around the world. The shape of the Middle East changed after the Tunisian government fell to people power in January. This event started the Arab Spring that saw Egypt’s Hosni Mubarak resign and popular uprisings spread across the Arab world. Libyan leader Muammar Gaddafi’s murder in October completed his country’s successful uprising. There were many natural disasters in 2011. The biggest was the earthquake and tsunami that devastated much of Japan’s northern coastline. It killed 15,840 people and created one of the world’s worst nuclear disasters. Floods in Rio de Janeiro and Thailand killed thousands. The world population officially hit 7 billion, although Osama bin Laden, Apple’s Steve Jobs and North Korean leader Kim Jong-il died.
As we approach the new year this year, sentiment is just about opposite to a year ago. Gone is the confidence for both the economy and stock market, replaced by worries about the debt crisis in Europe, and the budget deficits and dysfunctional politicians in Washington.
The consensus expectations this year are for a serious recession in Europe that will drag the rest of the world, including the U.S., into a serious global recession, and that the U.S. stock market will roll over into its next bear market early next year on those fears. t’s been a very difficult year for the market , 2011 was complete washout -- that very few people made money in that year. This year, if you are in the right stock, you may have made some money in the market -- people who stayed away of the dangerous sectors.
Summary:
Until at least the middle of the next decade, global growth is likely to
slow to approximately 3 percent per year on average–a rate somewhat below the
average of the last two decades. A recovery in advanced economies will be more
than offset by a gradual slowdown in emerging ones as they mature, with the net
result that global growth will slow. But the biggest risk ahead for the global
economy is not this slower overall growth in output but a slowdown in average
output per capita, which will determine how fast living standards can be
supported and raised.
Although the economy will improve slightly in the second half of the
year, 2012 will be the third straight year of disappointingly slow growth -- winding up at around 2% after inflation. The pace of growth in the
first half of the year totaled just 1.8%, the same as for all of 2011.
Look for the unemployment rate to end 2012 around 8%, not much less than
it is now or was in January. Unemployment might even
tick up briefly in the months ahead if more of the millions who have given up
looking for work rejoin the hunt. Counting some of these discouraged workers
and those forced to take a part-time gig, a broader measure of unemployment has
been climbing since February, hitting 15.2% in July and likely to end the year
around 15%.
Though still moderate, the pace of inflation will climb in the second half of 2012. Look for consumer prices, which rose at a 1.4% annual rate in the first half, to increase by a bit more than a 2% annual pace in the second, with the Consumer Price Index ending the year slightly less than 2% higher than in December 2011.
