US Just Might Be Able to Survive a Recession in Europe

Even with the European Union economy almost certainly headed for recession, hopes are growing that the U.S. will be able to escape the worst of the sovereign debt storm and keep moving on a slow-growth trajectory.

"Slow," of course, would be the operative word, as even the most optimistic economists don't put 2012 growth at much better than 2.5 percent or so.

Yet even that is an improvement from the sentiment of just a few weeks ago, when fears ranged from a mild recession all the way to depression as a combination of global and domestic debt problems seemed to all but assure an imminent crisis.

"A mild (European) recession is probably already baked in and most of the peripheral nations are already in recession," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "The fact that we could get some sort of a coordinated plan by the EU at the coming summit helps cushion a severe recession in Europe. That means that we continue to grow at a modest pace."

The reason for the hope is in itself tepid. Recent economic indicators have shown gains in consumer confidence, housing prices, and, most significantly, unemployment. Of 21 economic reports released last week, 10 beat expectations, nine missed and two were inline.

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