If there was one constant in a year of natural disasters, political disarray, terrorism fears and skyrocketing fuel costs, it's that the U.S. economy continued to cruise along unabated.
So say economic analysts who claim the devastation of Hurricane Katrina and the surge in oil prices last fall were essentially just a bump in the economic road. Tire retailers and auto service businesses can expect consumer confidence to continue to be steady and the economy to even improve by about 3 percentage points in 2006.
The economy during 2005, as predicted, was another year of slow yet steady growth.
``The doom and gloom predictions after (Hurricane) Katrina really didn't come through,'' said Michael Walden, an economics professor for North Carolina State University. ``The economy performed amazingly well. It's remarkable, given what we've gone through. It's been a remarkable year for the economy.''
Jonathan Steinmetz of Morgan Stanley agreed. ``At this point, our survey suggests that the fallout from hurricanes Katrina and Rita and the post-hurricane surge in energy prices is largely behind us,'' he said.
``I'm generally upbeat about '06 with an expanded economy and more jobs. I don't see inflation as a problem. I'd keep an eye on the Fed interest rate policy,'' Mr. Walden said. ``As long as there is job growth and economic growth, consumer confidence will continue to increase,'' he added.
Mr. Walden believes there is too much focus on ``consumer mood,'' which he said is directly parallel with gas prices. ``If prices are up, (consumers) get grumpy. If it goes down, they are less grumpy.''
He predicted 2006 will be ``a good year'' and advised businesses to ``keep an eye on interest rates and an ear open on forecasts.''
``If a business held off on capital improvements (in 2005), go do it (in 2006). I expect sales to generally increase,'' said Mr. Walden, echoing other analysts' opinions.
But the economic conditions likely will vary region to region. Ed King, director of small business services at Wayne State University, said Florida appears to be doing well economically while in Detroit, home of the struggling auto manufacturers, the economy is depressed.
Mr. Walden noted that the whole economic upturn has been shifting to the South. Despite the devastation hurricanes wreaked on the Gulf states, there is expected to be a business boom there with the influx of funds for rebuilding, he added.
However, the economic upturn can also be said to be shifting overseas. ``In the long, long run, we're becoming a world economy,'' Mr. King said. With jobs moving overseas, the standard of living in the U.S. will be adversely impacted. ``In 10 to 20 years I believe household income will go down in comparison to other countries,'' he predicted.