WASHINGTON — The economy is ending 2011 on a roll.
The job market is healthier. Americans are spending lustily on holiday gifts. A long-awaited turnaround for the depressed housing industry may be underway. Gas is cheaper. Factories are busier. Stocks are higher.
Not bad for an economy faced with a debt crisis in Europe and, as recently as this summer, scattered predictions of a second recession at home. Instead, the economy has grown faster each quarter this year, and the last three months should be the best.
“Things are looking up,” said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi UFJ.
When The Associated Press surveyed 43 economists in August, they pegged the likelihood of another recession at roughly one in four. The Dow Jones industrial average was lurching up or down by 400 points or more on some days.
There was plenty of reason for gloom. A political standoff on the federal borrowing limit brought the United States to the brink of default and cost the nation its top credit rating.
Most analysts now rule out a new recession. They think the economy will grow at an annual rate of more than 3 percent from October through December, the fastest pace since a 3.8 percent performance in spring 2010.
Many economists still worry that the year-end surge isn’t sustainable, in part, because the average worker’s pay is barely rising. And Europe may already be sliding into a recession that will infect the United States.
The outlook could darken further if Congress can’t break the impasse on an extension of a Social Security tax cut for 160 million Americans and emergency unemployment benefits.
Yet for now, the economy is on an upswing that few had predicted.
Areas of optimism
Jobs: The number of people applying for unemployment benefits came in at 366,000 last week, down from a peak of 659,000 in March 2009.
Spending: Holiday shopping has turned out better than anyone expected. Sales from November through Saturday were up 2.5 percent.
Consumer confidence: Americans felt better about the economy in November than they had since July, according to the Conference Board, a business group that tracks the mood of consumers.
Gas: Falling prices at the pump have freed more money for consumers to spend on other things that help drive the economy.
Inventories: Businesses are restocking shelves and warehouses, more confident that customers will buy their products.
