Nevertheless, she adds, the United States remains poised to at least partially fall off the “fiscal cliff,” citing politicians as responsible for this. Bostjancic predicts that politicians are likely to let the payroll tax cut and extended unemployment benefits expire at the end of this year. “This should depress economic growth to below 2 percent in the first half of 2013,” she says. “Assuming the economy does not go off a deeper cliff, however, activity could resume to more than 2.5-percent growth in the second half of the year. For that to happen, wage growth would have to pick up and give some much-needed impetus for consumption.”

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