EconomicCrisis.US

From the day he entered the White House, the biggest threat to Barack Obama’s chances of becoming a two-term president has been the battered state of the U.S. economy.

There have been new signs of trouble this spring: slower job growth, higher gasoline prices and fresh fears over the European debt crisis. Yet Obama’s prospects on the economic front may be brighter than they now look.

This past weekend brought encouraging signs that Europe is ready to take stronger action to confront its still-serious debt problems. During the spring meeting of the International Monetary Fund, which concluded Sunday, member nations pledged to nearly double the funds available to the globe’s emergency lender to address future crises.
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Since around 1870 the United States has had the largest economy in the world. In security matters, however, particularly in Europe, the US still played a limited role until the Second World War. In 1945, at the end of the war, the United States was clearly the strongest power the world had ever seen. It produced almost as much as the rest of the world put together. Its military lead was significant; its “soft power” even more dominant.

After the Second World War the American share of world production rapidly declined to 40 percent in 1950, 30 percent in 1960, and 25 percent in 1975. Soon predictions were made, not only by the Soviet leaders, that the Soviet Union would come to surpass the United States. The problems of the 1970s — Vietnam, Watergate, and the partial collapse of the Bretton Woods-system — indicated that the United States was in decline. In the 1980s predictions were made again; this time that Japan would come to surpass America. And, despite the 1990s being a very strong decade for the US, the many successes of the European Union soon made many observers predict that the future belonged to the EU.
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The United States added 227,000 jobs in February in the latest display of the economic recovery’s surprising breadth and brawn. The country has put together the strongest three months of pure job growth since the Great Recession.

The unemployment rate stayed at 8.3 percent. It was the first time in six months it didn’t fall, and that was because a half-million Americans, perhaps finally seeing hope in the economy, started looking for work.

The Labor Department also said Friday that December and January, already two of the best months for jobs since the recession, were even stronger than first estimated. It added 41,000 jobs to its total for January and 20,000 for December.
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The U.S. economy is improving faster than economists had expected. They now foresee slightly stronger growth and hiring than they did two months earlier — trends that would help President Barack Obama’s re-election hopes.

Those are among the findings of an Associated Press survey late last month of leading economists. The economists think the unemployment rate will fall from its current 8.3 percent to 8 percent by Election Day. That’s better than their 8.4 percent estimate when surveyed in late December.

By the end of 2013, they predict unemployment will drop to 7.4 percent, down from their earlier estimate of 7.8 percent, according to the AP Economy Survey.
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