2006: The Year in Business

Economic Slowdown -- A Soft Landing?

When the year began, the economy was running at a sizzling 5.6 percent annual pace of growth. But Federal Reserve Chairman Ben Bernanke and his predecessor, the legendary Alan Greenspan, had already started putting on the economic breaks with a bunch of interest rate hikes to keep inflation in check.

By the end of 2006, growth had slowed to just 2.2 percent.

Economists were worried the Fed might have overstepped, but signs during the last three months of the year pointed to a potential "soft landing" for the economy.

Dow Tops 12K

While the overall economy was slowing down, the stock market was taking off.

The Dow Jones industrial average -- a composite index that tracks the value of the 30 biggest publicly traded companies in the United States -- topped its dot-com bubble highs on Oct. 3.

By Oct. 19, the Dow was closing above the 12,000 mark -- a big, round number greeted with tons of coverage and more than a few "huhs?" by people on Main Street.

While average people were feeling the economy slowing, Wall Street was reaping the benefits of 13 consecutive quarters of double-digit profit growth.

That solid performance helped push the markets to their best year in quite some time, and Wall Street bonuses climbed to their highest levels ever.

There was also a little "exuberance" -- arguably of the irrational kind -- as Google ticked past the $500 per share mark this year -- on Nov. 21 to be exact -- just more than two years after selling shares to the public.

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