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Will weak global growth infect the U.S. economy?

The air is coming out of the global economy just as the U.S. is catching a tailwind. But can the American economy maintain its recent momentum even as growth around the world wanes?

The Organisation for Economic Cooperation and Development, which represents 34 of the world's largest economies, said inflation among its member countries through November had fallen to 1.5 percent. That followed a report Wednesday showing that December consumer prices in the eurozone had fallen for the first time in more than five years, highlighting the anemic demand that has kept the currency union in the deep freeze since the 2008 financial crisis.

Together, the data stirred fears of a potentially devastating downward spiral in prices and wages in the region.

In Asia, meanwhile, the Chinese government is trying to ensure a soft landing for its economy after years of runaway growth, while Japan remains mired in a slump that has lasted for more than two decades. Emerging markets also have weakened of late, hurt by falling oil and other commodity prices.

Oil prices, world economy fears spook stock markets

Such episodes, which include the Great Depression, can be even more destructive than sharp downturns like the massive recession that followed the housing crash. Falling costs for goods and services can cause consumers to delay spending in expectation of even cheaper prices down the road. As business sales and profits dry up, companies may respond by pulling back on hiring and other investments. Deflation is also notoriously hard to escape, as sliding wages and employee layoffs scare workers into paring their spending even more, continuing the downward spiral.

Federal Reserve officials this week expressed concern that weakening growth abroad could dent the U.S. recovery, chiefly by reducing demand for American exports. Economists also warn that the ongoing plunge in crude oil prices is likely to keep inflation in check at least through 2015. That would work against Fed efforts to drive inflation closer to its 2 percent target, which the central bank views as consistent with strong economic growth.

So, is the U.S. economy strong enough to avoid being dragged down by its trading partners?

For now, most experts think the recovery is likely to remain on track, and they downplay the risks posed by the global slowdown. The plunge in gasoline prices, which have fallen more than 50 percent since June, is proving to be a particular boost for the economy, economists say.

"U.S. economic fundamentals are still pretty good," said Gus Faucher, senior economist with PNC Financial Services Group. "Consumers have lots of cash, and will have more more of it because they're paying less to fill up their tank. Demand domestically is growing, and we expect to see an improving housing market this year."

U.S. economy shifts into overdrive

"Slowing overseas growth is going to be a modest drag, but it's not enough to significantly slow U.S. growth," Faucher added.

PNC expects the nation's GDP -- the total value of goods and services produced in the U.S. -- to expand 3.3 percent this year. That would represent the strongest annual growth since 2005.

U.S. multinationals will bear the brunt of the slowdowns in Europe and Asia. But small and midsize businesses are unlikely to feel the pinch because they focus on the domestic market, noted Jim O'Sullivan, chief U.S. economist with High Frequency Economics. Consumer confidence has also risen to post-recession highs as the labor market has improved, which should fuel spending.

"The U.S. economy overall is hardly booming, but it's growing at an above-trend rate," said O'Sullivan, who forecasts 3 percent GDP growth for the year.

Not that economists entirely dismiss the threat of a prolonged downturn in Europe. Many analysts expect the European Central Bank to announce a major stimulus program at its Jan. 22 meeting.

"The ECB does need to get its act together and recognize that this is a serious threat to Europe, but I'm confident that they do recognize that," Faucher said.

The U.S. economy faces its next text on Friday, when the Labor Department releases its December payroll report. Employers far surpassed expectations in November by adding 341,000 jobs. Consensus forecasts are for 230,000 new jobs last month, with the nation's unemployment rate expected to tick down to 5.7 percent.

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