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Associated Press photos
Led by Chairman and CEO Mark Zuckerberg, center, Facebook’s IPO started with great promise, but the company’s stock quickly fizzled. The Facebook IPO was voted the No. 5 business story of 2012.

Sluggish world economy top story of 2012

Apple introduced the iPad Mini this year. The mobile-gadget wars was voted the No. 10 business story of 2012.

This would be the year when the global economy finally regained its vigor. At least that’s what many had hoped.

It didn’t happen.

The three largest economies – the United States, China and Japan – struggled again in 2012. The 17 countries that use the euro endured a third painful year in their financial crisis and slid into recession. Emerging economies slowed.

President Obama defied predictions by sailing to re-election. And his landmark health care plan surprisingly survived Supreme Court review. Obama’s re-election triggered a face-off with Republicans over averting the fiscal cliff – the drastic spending cuts and tax increases that were set to kick in Tuesday.

The tech world dueled over smartphones and tablets and saw Facebook’s IPO sour as fast as it had sizzled. The housing market inched toward recovery. And Americans suffered both a catastrophic drought and a catastrophic superstorm.

Least surprisingly, perhaps, another gallery of rogues brought investigative scrutiny to Wall Street.

The achingly slow global economic recovery was chosen as the top business story of the year by business editors at The Associated Press.

The U.S. presidential election came in second, followed by the Supreme Court’s upholding Obama’s health care plan.

1. The global economy: Worldwide growth was slack again in 2012. The global economy grew just 3.3 percent, down from 3.8 percent in 2011 and 5.1 percent in 2010, the International Monetary Fund estimates. The U.S. economy, the world’s largest, failed to gain traction. Five years after a recession seized the economy and more than three years after it ended, growth in the United States was only about 2 percent. Unemployment remained a high 7.7 percent.

Europe fared worse. Its financial crisis did stabilize, thanks in part to the European Central Bank’s plan to buy government bonds to help countries manage their debts. But the euro alliance sank into recession. Europeans, in turn, held back China, the world’s No. 2 economy, by cutting back on Chinese goods. China’s economy grew at a 7.4 percent annual rate in the July-September quarter. And at year’s end, Japan’s economy, the world’s third-largest, was shrinking.

2. U.S. presidential election: Obama vaulted to a re-election victory over Mitt Romney, who had staked his bid on the weakest U.S. economic rebound since the Great Depression and had pledged to slash taxes. Unemployment under Obama topped 8 percent for 43 straight months.

Yet he won despite the highest unemployment rate of any president seeking re-election since World War II. Voters assigned him higher marks on the economy as the year progressed, perhaps encouraged by job gains. As the fiscal cliff neared, Obama fought to raise taxes on the highest-earning Americans. He also demanded aid for the long-term unemployed and money for roads, bridges and other infrastructure. Economists raised hopes that if the fiscal cliff was averted, the gloom would lift in Obama’s second term.

3. Obama health care plan upheld: The Supreme Court caught many by surprise when it backed Obama administration’s health care law in a 5-4 vote. The law requires Americans to buy insurance or pay a tax, while subsidizing the needy. Hospitals and health insurers will likely benefit from 30 million new customers. Medical device makers, though, will face a new sales tax. And some small businesses say the law will discourage hiring because it requires companies to provide health care once they employ more than 50.

4. The fiscal cliff: A dreaded package of tax increases and deep spending cuts to domestic and defense programs loomed over the economy in the year’s final months. Negotiators struggled to forge a budget deal to avert those measures. If they failed, the tax increases and spending cuts would kick in Jan. 1.

5. Facebook’s IPO: Years of anticipation led to Facebook’s initial public offering of stock – the hottest Internet IPO since Google’s in 2004. Many of the billion or so users of the world’s largest online social network craved a chance to buy in early. On the eve of its first trading day, Facebook’s market value was $104 billion – more than Amazon.com’s or McDonald’s at the time. Yet the IPO bombed. Its debut was marred by technical glitches with the Nasdaq exchange, allegations that a revenue gap wasn’t publicly disclosed and complaints that the IPO had been priced too high. Traders lost confidence fast. Within three months, Facebook’s stock had shed more than half its IPO value.

6. Housing recovery: After a six-year slump that sent more than 4 million homes into foreclosure and shrank home prices about one-third nationwide, the U.S. housing market began to recover in mid-year.

7. The return of big oil: Domestic crude oil production achieved its biggest one-year gain since 1951, driven by output in North Dakota and Texas. The United States is on pace to pass Saudi Arabia as the world’s top oil producer within two years.

8. Banks behaving badly: It was a banner year for bank drama. JPMorgan Chase lost $6 billion in a complex series of trades. Morgan Stanley was accused of botching Facebook’s IPO. An ex-banker trashed Goldman Sachs for putting profits ahead of customers and for mocking clients as “muppets.” Barclays and UBS were fined for their roles in manipulating a key global interest rate. And HSBC agreed to pay $1.9 billion to settle charges that it enabled money laundering by Mexican drug traffickers.

9. Mother Nature: There wasn’t enough rain in much of the nation. Then, suddenly there was much too much. The nation suffered its worst drought since the 1950s, covering 80 percent of U.S. farmland. Grain and food prices soared. Then a storm so destructive it was dubbed a “superstorm” walloped the Northeast. Sandy blasted coastal New Jersey and New York and put 8.5 million customers in 21 states in the dark.

10. Mobile-gadget wars: Competition in mobile technology intensified. Apple maintained its worldwide dominance. But the use of Google’s Android software on competing smartphones and tablets spread faster than Apple’s market share. Forty-four percent of U.S. adults own smartphones, up from about 35 percent a year ago. Tablet ownership doubled in 2012. Taking on Apple’s iPad, Microsoft unleashed its Surface tablet and began selling Windows 8, a tablet-friendly operating system. Amazon and Barnes & Noble rushed out high-definition-screen tablets. Apple struck back with the iPad Mini.

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