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Economy’s struggle is 2010’s top business story
ASSOCIATED PRESS
Photo
In this Sept. 21, 2010 photo, demonstrators hold signs in front of Bank of America in San Jose, Calif., during a rally protesting thousands of bank foreclosures in San Jose.
Associated Press
WASHINGTON
In 2010, the economy rebounded fitfully from the Great Recession — starting strong, wobbling at midyear but showing enough vigor by year’s end to quell fears of a second recession. Yet Americans hardly felt relief under the weight of high unemployment, which began the year at 9.7 percent and is now 9.8 percent.
The struggling economy was voted the top business story of the year by U.S. newspaper editors surveyed by The Associated Press.
ECONOMY STRUGGLES
Climbing out of the deepest recession since the 1930s, the economy grows at a healthy rate in the January-March quarter. Still, the gain comes mainly from companies refilling stockpiles they had let shrink during the recession. The economy can’t sustain the pace. The lingering effects of the recession slow growth.
The benefits of an $814 billion government stimulus program fade. Consumers cut spending in favor of building savings and slashing debt. Businesses hesitate to hire. Cities and states lay off workers. Growth slows through spring and summer.
Unemployment stays high. In May, the number of people unemployed for at least six months hits 6.8 million — a record 46 percent of all the unemployed.
As the year closes, the economy makes broad gains. Yet more than 15 million Americans are still unemployed. Economists say a full economic recovery remains years away.
GULF OIL SPILL
An explosion at a rig used by BP kills 11 workers and sends crude oil gushing into the Gulf of Mexico. The spill devastates the fishing and tourism industries along the Gulf Coast and causes environmental damage that may last for decades.
The oil giant still faces civil charges and a criminal investigation by the Justice Department and lawsuits from hundreds of individuals and businesses.
CHINA’S RISE
China passes Japan as the world’s second-biggest economy. The World Bank says it could surpass the United States by 2020. China’s gross domestic product is spread out over 1.3 billion people — amounting to about $3,600 per person. That compares with GDP in the U.S. of about $42,000 per person. In Japan, it’s about $38,000 per person.
REAL-ESTATE CRISIS
Housing remains depressed despite super-low mortgage rates. The average rate on a 30-year fixed mortgage dips to 4.17 percent in November, the lowest in decades. But home sales and prices sink further. Nearly one in four homeowners owe more on their mortgages than their homes are worth. An estimated 1 million households lose their homes to foreclosure.
TOYOTA’S RECALL
Toyota’s reputation for making high-quality cars is tarnished after the Japanese automaker recalls 10 million vehicles for sudden acceleration and other problems. Toyota faces hundreds of lawsuits.
GM’S COMEBACK
General Motors stock begins trading again. It signals the rebirth of a corporate icon that fell into bankruptcy and required a $50 billion bailout from taxpayers. GM uses some proceeds from its November initial public offering to repay a portion of its bailout.
FINANCIAL OVERHAUL
Congress passes the biggest rewrite of financial rules since the 1930s. The law targets the risky banking practices and lax oversight that led to the 2008 financial crisis. The law creates an agency to protect consumers from predatory loans and other abuses and empowers regulators to shut down big firms that threaten the entire system.
EUROPEAN BAILOUTS
Greece and Ireland require emergency bailouts, raising fears that debt problems will spread and destabilize global markets. European governments and the International Monetary Fund agree to a $145 billion rescue of Greece in May and a $90 billion bailout of Ireland in November.
500 MILLION FACEBOOK USERS
Facebook tops the 500-million-user mark. It expands its dominance of social media and further transforms how the world communicates. Founder Mark Zuckerberg is named Time magazine’s “Person of the Year.”
IPAD MANIA
Apple Inc. unveils the iPad, bringing “tablet” computing into the mainstream and eroding laptop sales. Apple is expected to sell more than 13 million iPads this year.