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A glimmer of positivity breaks through all the greyness in the U.S. labour market. The nation’s economy is reported to have added a 200,000 jobs going into 2012. A vital sign that the U.S. recovery is taking hold and a sustained economic recovery may be in store.

So optimistic is Doug Porter, deputy chief economist, BMO Capital Markets, that he said 2012 may well be the year the U.S. catches up to or even surpasses Canada on a number of key economic indicators.

“Over the last four or six months, the one rare bright spot for the global economy has been how well the U.S. economy has actually held up and a big part of that story has been the U.S. consumer and over the past six months,” said Porter. “In fact, in 2011 U.S. consumer spending grew faster that the Canadian consumer spending did for the first time in five years.”

And despite all the dire headlines about the U.S. economy, Porter expects the trend to continue in 2012. He is not alone. Oliver Pursche, co-portfolio manager of GMG Defensive Beta Fund, in his annual prediction said not only will the U.S. avert recession; its GDP will grow by about 2%.

“Wider recognition that a recession has been averted will kick in during the second quarter [of 2012], and this belief will act as a catalyst for stocks,” he said. “The announcement of first quarter GDP [2012]—to be announced during the second quarter—will surprise to the upside, and positive revisions to the third and fourth quarter of 2011, will drive the final stake through the heart of recession fears.”

The U.S. will probably avoid a recession, said Nariman Behravesh, chief economist at IHS Global Insight, in his Top-10 Global Economic Predictions. “The good news is that U.S. domestic risks have diminished somewhat, and growth momentum has picked up modestly.”

Witnessing a major shift also in the U.S. housing landscape, Porter said the U.S. growth in 2012 will be well supported by the housing sector which is expected to pick up after declining for six consecutive years.

“[After] dropping to a record low of barely a 2% share of GDP, residential construction is finally poised to add, albeit slightly, to U.S. growth next year,” he said. “Homebuilder sentiment is slowly improving, home sales are creeping off the bottom, and rising rents are spurring construction of multiple-unit buildings.”

That’s not to suggest there aren’t serious risks. Domestically, the biggest risk is on the political side with presidential and state elections looming November this year.  

“There is lots of room for mischief-making on behalf of the U.S. politicians,” said Porter. “We’ve only got a two-month reprieve in terms of extending the payroll tax cuts and the extension of unemployment insurance benefits, I’m sure we’ll have a little bit more drama before the end of February on whether those get extended or not,” he added.

Externally, some of the biggest risks to the U.S. outlook could come from Europe and oil prices, most probably from the latter. “Europe is an abstract concept to most U.S. consumers,” said Porter. “But the price of gasoline is not, and one can’t help but be impressed how oil prices were $100 a barrel even before the sabre rattling from Iran; those two are the biggest risks to the U.S. economy at this point.”

Originally published on Advisor.ca