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A short fall over the cliff won't push the economy into recession. But most economists expect some tax increases to take effect next year. That could slow economic growth. While consumers are more worried about where the economy is headed, they were upbeat about present conditions, according to the latest survey. Their assessment of current economic conditions rose this month to the highest level since August 2008. A key reason for that is gas prices hit a 2012 low of $3.21 a gallon last week. Normally, that would prompt consumers to spend more on holiday shopping. But the opposite has happened. A report from MasterCard Advisors Spending pulse indicated sales grew in the two months before Christmas at the weakest rate since 2008, when the country was in a deep recession. There were other distractions this holiday season. In late October, Superstorm Sandy battered the Northeast and mid-Atlantic states, which account for 24 percent of U.S. retail sales. That coupled with the presidential election, hurt sales during the first half of November. Shopping picked up in the second half of November. But "fiscal cliff" worries dampened sales in December. The National Retail Federation, the nation's largest retail trade group, remains optimistic that sales won't be quite as bad as earlier reports have suggested. It is sticking to its forecast for total sales for November and December to be up 4.1 percent to $586.1 billion this year. That's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009 when sales were up just 0.3 percent.
[Associated
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