When it comes to economies, it may be true that time heals wounds.
Certainly America and much of the rest of the world have had economies severely wounded by the Great Recession. Some thought the wounds, if not fatal, were crippling, and that Europe was likely to fall into a second deep financial malaise that would, in this interconnected world, reach across the Atlantic and drag the U.S. back into another recession as well.
Funny thing, though. It looks like the economy may be recovering at a faster clip than many experts imagined. Economists are predicting a quicker turnaround than they did just two months ago.
The Associated Press conducted a survey of economists in late February and found that they believe the unemployment rate will drop to 8 percent by early November, four-tenths of a percentage point better than they predicted in late December. When the jobs report is issued Friday, expectations are that employers will have added about 210,000 new jobs in February -- not enough to drop the current jobless rate of 8.3 percent, but enough to keep it steady.
Meanwhile, U.S. industrial production has been up in both December and January, auto sales are getting a lot healthier and consumers are gaining confidence. That latter category is the most critical. If a person is afraid the economy is going to tank, he or she will keep their money tucked away. If the feeling is that the economy has stabilized and is improving, then consumers are much more likely to buy that car, make home improvements, buy a home, go on vacation and do other things that require spending.
And if that happens, the cycle that has been so vicious for so long would reverse, with spending begetting more production begetting more jobs begetting more confidence begetting more spending, both from loosened purse strings and from an expanded employed work force.
The latest survey doesn't mean a quick return to minuscule unemployment, but it offers better numbers. The estimate of 7.8 percent joblessness by the end of 2013 has dropped to 7.4 percent in February's reassessment of last December's predictions. And that number doesn't count those who have given up hope of finding a job. Many of those surveyed by AP were surprised that more people haven't re-entered the job search market, which would actually cause an uptick in unemployment. There are still 5.5 million fewer jobs in America than there were when the recession hit in 2007.
And we have to be concerned about fuel prices, which are at historic highs for this time of year. Already premium gasoline in our area has eclipsed the $4 per gallon mark, and there seems to be no slowing a steady rise in pump prices. Nationally, AAA says the average price of a gallon of regular self-pump gas Monday was $3.767, up from $3.503 this time last year and $3.475 just a month ago. In Georgia, the average cost per gallon for regular is $3.701, up from $3.431 this time last year. It wasn't so long ago that it took a hurricane slamming into the Gulf refineries to raise prices to those levels. One can only wonder how high they will go if we have a violent hurricane season in the Gulf this spring.
A jump in gas prices into the $5-a-gallon area because Gulf refineries have to shut down as tropical storms pass would put a crimp in wallets that could bring recovery to a screeching halt.
We can only hope that doesn't happen and that U.S. consumers and businesses continue to do what they do best. Politicians love to claim the credit and lay blame on their opponents, but the economy rises and falls because of consumers. As long as they are confident, they will pull the economy along.
-- The Albany Herald Editorial Board