U.S. Economy May Grow Despite Europe Woes

British consultancy sees euro crisis staying localized

Can the U.S. avoid contagion from Europe's steadily worsening economic mess? An Oct. 24 report from Capital Economics, a U.K.-based consultancy, says yes. "We expect the euro zone to experience a deep recession next year but the U.S. to grow steadily," writes Andrew Kenningham, a London-based senior global economist. Capital Economics is looking for gross domestic product to rise 2 percent in 2013 in the U.S. while falling 2.5 percent in the 17-nation euro zone.

The U.S. and European economies usually move together because they're affected by the same forces, such as ups and downs in oil prices. In this case, though, Europe is facing a "region-specific shock" that hasn't hit the U.S., Kenningham notes. The euro zone crisis has also been slow-moving, so U.S. firms have been able to brace themselves.