Recovery among regional economies in the United States has yet to shift into high gear; the largest risk for the U.S. job market currently comes from Europe, as concern over global growth has pushed past oil prices as a major risk factor.
The US economy will continue to recover in 2012 from the Great Recession, as unemployment rates fall, payrolls expand, and incomes rise across the nation. The US economy is producing more than ever. Growth in gross domestic product (GDP) has shown consistent improvement since the contraction in 2008 and 2009, surpassing its pre-recession peak levels – in real terms – by the middle of 2011. With each passing quarter, more and more regional economies are seeing their employment levels return to peak and their housing markets stabilize.
Recovery has yet to shift into high gear, however, as there has been a steady diet of disappointing news from abroad. While oil prices are typically a primary risk factor for the national economy, currently the largest risk for the US job market is Europe, since trepidation over global growth has caused oil prices to tumble to the point where they are no longer a major concern. Indeed, oil prices have moderated this year, giving a needed boost to household budgets, and will provide an important support to US growth in the second half of the year. The average price of gasoline will fall to $3.11 per gallon in the fourth quarter.
Europe is at risk due to several constituent crises, while prospects for large markets like China, India, and Brazil have also slowed. These factors pose a risk to the US economic recovery as they negatively impact consumer confidence, exports, and financial markets. Despite these downward pressures, however, payrolls in the US have expanded and the jobless rate has been on the decline, thanks in large part to recovery and growth in the nation's metropolitan economies.