President Barack Obama's victory in November was the climax to an abrasive election season in which both sides raised about US$2 billion ($2.4 billion), a United States record. Much was spent on negative TV advertising and get-out-the-vote strategies.
Democrats increased their Senate majority, while Republicans retained the House of Representatives but lost seats.
Shifting demographics favoured Obama - who won with 332 Electoral College votes and 50.95 per cent of the popular vote, decisively beating his Republican challenger Mitt Romney (206 Electoral College votes and 47.31 per cent of the popular vote) - with support from minorities, people under 30 and single women, leaving multimillionaire Romney reliant on a shrinking pool of white males.
Voters were focused on jobs and the ailing economy, and Obama benefited from falling unemployment and perceptions that Romney favoured the rich.
The real loser was the Republican Party, which found itself behind the curve as minorities - 37 per cent of Americans and projected to be 57 per cent by 2060 - flexed their political muscle, a seismic shift that may auger a pendulum swing leftwards.
The dust had barely settled before Washington faced the "fiscal cliff", a package of spending cuts and tax increases that starts on January 1 unless a deal is found to reduce the US$16.4 trillion deficit.
Despite fears of a second-dip recession, partisanship persisted. Republican House Speaker John Boehner's plan to raise tax rates for millionaires flopped when conservatives baulked.
By year's end, both parties were staring into the abyss. Doom and gloom were offset by tentative economic revival. Growth for the third quarter was 3.1 per cent, housing sales were up and unemployment was 7.7 per cent in November, the lowest level since Obama took office, although many people had stopped looking for jobs.
A tight oil and shale gas boom, using fracking, fed hopes of US energy independence and economic growth.
The downside may be a surge in carbon emissions that fuel climate change.
Extreme weather ravaged the US. Drought seared two-thirds of the lower 48 states, devastating corn, maize and soybean crops. Superstorm Sandy smashed into the northeast days before the election, killing 125 people and flooding coastal areas, including parts of New York City.
Damage was estimated at US$62 billion, the second most costly storm in US history.
New York's Republican mayor Michael Bloomberg said climate change was a serious threat.
A Pew Poll in October said 67 per cent of Americans agreed, but only 42 per cent blamed humans.
California prepared to curb carbon emissions by rolling out a mandatory cap and trade scheme from January, starting with large power plants and industrial concerns.
Nasa retired its space shuttle fleet, leaving the US space agency dependent on Russia to reach the International Space Station.
But Nasa scored with an unmanned flight when the Curiosity rover landed on Mars. Voyager 1, a US space probe launched in 1977, reached interstellar space.
Gunmen stormed the Benghazi consulate in Libya, killing the US ambassador and three officials on the 11th anniversary of the 9/11 attacks. A report cited "systemic" security failures. Secretary of State Hillary Clinton decided to step down in January, sparking rumours of a 2016 White House run. Senator John Kerry was nominated for the post.
The US set a 2014 deadline to leave Afghanistan and resisted calls for air attacks against the Syrian regime.
Drone strikes against al-Qaeda and insurgent groups intensified in Pakistan, Yemen and elsewhere. Critics called the strikes, which have killed many civilians, including children, war crimes.
Army prosecutors sought the death penalty for Staff Sergeant Robert Bales, charged with murdering 16 Afghani civilians.
CIA director David Petraeus quit after admitting an extramarital affair with his biographer, Paula Broadwell.
The trial of Private Bradley Manning, accused of leaking US secrets to WikiLeaks, was delayed following claims that he had suffered unlawful confinement. WikiLeaks founder Julian Assange said the whistleblower site would release a million documents in 2013, affecting "every country in the world".
The US began to "pivot" 60 per cent of its military assets into the Asia-Pacific region to counter growing Chinese power. Talks continued on the controversial Trans Pacific Partnership Agreement, trumpeted as a free trade deal but criticised as a Trojan Horse that would allow US corporates to ride roughshod over signatories' national sovereignty.
Tech companies ruled. Apple, the world's richest company, was valued at US$488 billion by December. Newsweek folded its print edition after 80 years and went digital.
A federal court ordered Philip Morris and two other tobacco companies to publish explicit messages admitting they "deliberately deceived" consumers about the dangers of smoking cigarettes and manipulated nicotine levels to boost addiction.
Colorado and Washington defied federal law and legalised recreational marijuana. The Food and Drug Administration said GM salmon, the world's first genetically modified animal, posed no risk to human health.
In a surprise move the US Supreme Court upheld "Obamacare", which extends health coverage, and agreed to hear two gay marriage cases, a new culture war flashpoint. Washington, Maine and Maryland became the first states to legalise same-sex unions.
As Christmas neared Adam Lanza, 20, shot dead his mother then killed 20 children, aged 6 and 7, and six teachers at Sandy Hook Elementary School in Newtown, Connecticut, the second worst school shooting in US history. Shocked Americans demanded gun reform.
Obama ordered a task force to fast-track an assault weapons and high-capacity magazine ban.
The National Rifle Association opposed bans, blamed violent films and video games and said schools needed armed guards. An arsonist gunman ambushed firefighters, killing two, in New York state as thousands petitioned Obama to deport CNN host Piers Morgan, after the Briton exercised his free speech rights to back the Obama ban in a "hostile attack" against the constitution's 2nd Amendment. Gun sales soared.By Peter Huck