Consumers are paying off their debts.
At the start of the recession in 2007, the debt load was nearly double the countrys gross domestic product. But wary consumers have reduced their debt load to about 85 percent of the U.S. economy and that could drop to about 75 percent in 2013, USA Today reported. The reduced debt load could lead to increased consumer spending needed to spur the economy.
A combination of less debt, an improving housing market and job growth could push consumer spending up 3.5 percent by late next year, Moodys Analytics economist Scott Hoyt told USA Today. That rate would be double what the economy saw in this years second quarter.
Members of the Federal Reserve are also predicting the economy will grow between 2.5 percent and 3 percent next year.
Richard Moody, chief economist at Regions Financial, said that things will start to look better in 2013. But looming over the positive outlook is how the president and Congress will deal with the so-called fiscal cliff at the end of the year. Failure to deal with expiring tax cuts and deep federal budget cuts by that time could turn the economy back toward a recession.