This would be the year when the global economy finally regained its vigor. At least that's what many had hoped.
It didn't happen.
The three largest economies — the United States, China and Japan — struggled again in 2012. The 17 countries that use the euro endured a third painful year in their financial crisis and slid into recession. Emerging economies slowed.
President Barack Obama defied some predictions by sailing to re-election. And his landmark health care plan survived Supreme Court review. Obama's re-election triggered a face-off with Republicans over averting the “fiscal cliff” — the spending cuts and tax increases that were set to kick in Jan. 1.
The tech world dueled over smartphones and tablets and saw Facebook's IPO sour as fast as it had sizzled. The housing market inched toward recovery. And Americans suffered both a catastrophic drought and a catastrophic superstorm.
The achingly slow global economic recovery was chosen as the top business story of the year by business editors at the Associated Press.
1. THE GLOBAL ECONOMY
Worldwide growth was slack again in 2012. The global economy grew just 3.3 percent, down from 3.8 percent in 2011 and 5.1 percent in 2010, the International Monetary Fund estimates. The U.S. economy, the world's largest, failed to gain traction. More than three years after the Great Recession ended, growth in the United States was only about 2 percent. Unemployment remained a high 7.7 percent. Europe fared worse. Its financial crisis did stabilize, but the euro alliance sank into recession. Europeans, in turn, held back China, the world's No. 2 economy, by cutting back on Chinese goods. And at year's end, Japan's economy, the world's third-largest, was shrinking.
2. U.S. PRESIDENTIAL ELECTION
Obama vaulted to a re-election victory over Mitt Romney, who had staked his bid on the weakest U.S. economic rebound since the Great Depression and had pledged to slash taxes. Unemployment under Obama topped 8 percent for 43 straight months. Yet he won despite the highest unemployment rate of any president seeking re-election since World War II. Voters assigned him higher marks on the economy as the year progressed, perhaps encouraged by job gains.
3. OBAMA HEALTH CARE PLAN UPHELD
The Supreme Court caught many by surprise when it backed the Obama administration's health care reform in a 5-4 vote. The law requires Americans to buy insurance or pay a tax, while subsidizing the needy. Hospitals and health insurers will likely benefit from 30 million new customers. Medical device makers, though, will face a new sales tax. And some small businesses say the law will discourage hiring because it requires companies to provide health care once they employ more than 50.
4. THE FISCAL CLIFF
A dreaded package of tax increases and deep spending cuts to domestic and defense programs loomed over the economy in the year's final months. Negotiators struggled to forge a budget deal to avert those measures. If they failed, the tax increases and spending cuts would kick in Jan. 1. That threat was intended to be so chilling that it would force Congress and the White House to take the painful budgetary steps needed to avoid it. Economists warned that if the fiscal cliff measures remained in place for much of 2013, they would cause a recession.
5. FACEBOOK'S IPO
Years of anticipation led to Facebook's initial public offering of stock — the hottest Internet IPO since Google's in 2004. Many of the billion or so users of the world's largest online social network craved a chance to buy in early. On the eve of its first trading day, Facebook's market value was $104 billion. Yet the IPO bombed. Its debut was marred by technical glitches with the Nasdaq exchange, allegations that a revenue gap wasn't publicly disclosed and complaints that the IPO had been priced too high. Within three months, Facebook's stock had shed more than half its IPO value.
6. HOUSING RECOVERY
After a six-year slump that sent more than 4 million homes into foreclosure and shrank home prices about one-third nationwide, the U.S. housing market began to recover in midyear. Prices began rising, and builders broke ground on the most homes in four years. Housing boosted economic growth this year for the first time since 2005.
7. THE RETURN OF BIG OIL
Domestic crude oil production achieved its biggest one-year gain since 1951, driven by output in North Dakota and Texas. The United States is on pace to pass Saudi Arabia as the world's top oil producer within two years. Credit goes to drilling improvements, like those that have fed a boom in domestic natural-gas production — horizontal drilling combined with hydraulic fracturing, or fracking.
8. BANKS BEHAVING BADLY
JPMorgan Chase lost $6 billion in a complex series of trades, and one of its bankers in London grew famous for big bets. Morgan Stanley was accused of botching Facebook's IPO. An ex-banker trashed Goldman Sachs for putting profits ahead of customers and for mocking clients as “muppets.” Barclays and UBS were fined for their roles in manipulating a key global interest rate.
9. MOTHER NATURE
There wasn't enough rain in much of the nation. Then, suddenly there was much too much. The nation suffered its worst drought since the 1950s, covering 80 percent of U.S. farmland. Grain and food prices soared. Then a superstorm walloped the Northeast. Sandy will likely end up as the second-costliest U.S. storm ever after Hurricane Katrina.
10. MOBILE-GADGET WARS
Competition in mobile technology intensified as companies unleashed more gadgets. Apple maintained its worldwide dominance, but the use of Google's Android software on competing smartphones and tablets spread faster than Apple's market share. Forty-four percent of U.S. adults own smartphones, up from about 35 percent a year ago. Tablet ownership doubled in 2012.