America has been here before. A steady Llabour market recovery seemed possible early in 2010, when gdp growth approached 4%, until panic over a developing European debt crisis kept unemployment aloft for much of the year. Many expected 201a to be different; instead high oil prices and disasters, natural and political, left the economy perilously close to recession. Despite a surprisingly strong end to 2011, Americans chastened by recent history are unwilling to conclude that a corner has at long last been turned. Not without reason. The euro will continue to fray nerves, as will a slowdown in emerging markets and political dysfunction at home. Yet there are more grounds for hope than previously. America's housing market is much closer to health. Prices remain wobbly, but sales and construction are rising from record lows. Residential investment will probably contribute positively to growth in 2012, rather than negatively. The same may also be true of state and local governments, which have likewise proven a steady drag on growth since the end of the recession in 2009.
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