War winding down, economy winding up

At press time, U.S. and U.K. forces held most of Iraq and the war against Saddam Hussein's regime was widely viewed by a relieved American public as winding down or at least heading toward the postwar phase of reconciliation and reconstruction. Reflecting that positive state of affairs, on April 16 the Bush Administration lowered the official terror alert level to (indicating a significant risk of

At press time, U.S. and U.K. forces held most of Iraq and the war against Saddam Hussein's regime was widely viewed by a relieved American public as winding down — or at least heading toward the postwar phase of reconciliation and reconstruction.

Reflecting that positive state of affairs, on April 16 the Bush Administration lowered the official terror alert level to “yellow” (indicating a significant risk of attack) from “orange” (high risk), where it had been since the war's onset.

How long it will take to repair Iraq and then leave it as a functioning but non-threatening nation remains to be seen, but some conclusions about the impact of the war's denouement on trucking can already be drawn.

The most immediate positive effect was the sharp fall in fuel prices that began to be felt even before all those giant statues of Saddam began to topple last month.

As this issue went to press, the average price at the pump for a gallon of diesel was $1.539. The price had not been that low since February 2, when it was $1.542.

Adding Iraqi crude back into the world's oil mix is expected to cause the price per barrel to plunge, analysts contend.

“It's a definite possibility that could be just a few weeks away,” pointed out Tom Logsdon, a member of the U.S. Army Corps of Engineers charged with repairing Iraq's oil fields.

Logsdon said the southern Iraq oil fields, where output was up to 2.1-million barrels a day before the war, could be up and running in less than three months.

The general economic outlook is also rosier, a natural occurrence when a war is regarded as having been successfully carried out.

Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, speaking at the American Truck Dealers convention last month, said the U.S. economy had actually been improving a year ago. He said it began to lose steam last summer and hit a soft spot in the fourth quarter as the threat of war in Iraq increased.

Though it's too soon to declare the U.S. economy back on track, Santomero thinks economic growth should accelerate over the rest of the year to between 3% and 4%, and then continue strong into '04.

“Business spending was beginning to turn around last year until the Iraq situation generated uncertainty,” he said. “So the business sector should begin to show improvement now, though it's likely to be gradual.”

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