As 2010 ends, the nation's economy overall looks more promising than it did a year ago, but pockets of deep concern remain.
The biggest worries are in the job market and in housing, both of which remain battered by the recession and its aftermath. The gross domestic product, the broadest measure of economic performance, is growing steadily again - but slowly. The federal budget deficit also is deeply worrisome, and both President Obama and Congress have vowed to tackle the problem in 2011.
For investors, though, 2010 has largely been a year of gains. The three major stock indexes will each finish 2010 with double-digit increases.
Commodity prices, too, are rising: Gold, silver, copper, corn, wheat, cotton, and oil, to name just a few, soared this year as demand from India, China, and other developing countries increased.
With the year ending on a high note for stocks, investors are the most bullish they have been since 2004, said Jeffrey Kleintop, chief market strategist at LPL Financial, which provides services to financial advisers. But he adds a cautionary note.
"History tells us that when there are too many bulls, the market may be due for a pullback," said Kleintop, who forecasts a "middle-of-the-road" 2011 that he said should offer single-digit percentage gains for stocks, low to middle single-digit gains for bonds, and a U.S. economy that muddles along at a 2.5 percent to 3 percent growth pace for the gross domestic product.
For comparison, the GDP, the total value of all goods and services produced in the United States, grew between 4.4 percent and 4.8 percent annually in the late 1990s' economic boom.
Perhaps the biggest question now is: Why isn't anyone hiring?
Actually, many American companies are - just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the United States. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent in November, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year.
But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with fewer than a million in the United States. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, said Robert Scott, the institute's senior international economist.
"There's a huge difference between what is good for American companies vs. what is good for the American economy," Scott says.
American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated - think semiconductors and software, not toys and clothes.
And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China, and Brazil.
Meanwhile, consumer demand in the United States has been subdued. Despite a strong holiday shopping season, Americans are still spending 18 percent less than before the recession on furniture, and 10 percent less on electronics, according to MasterCard's SpendingPulse.
"Companies will go where there are fast-growing markets and big profits," said Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."