To someone with a hangover, the pop of a fire-cracker can sound like the boom of a cannon.
Similarly, to an economy still cluttered with the two-year-old memory of the worst inflation and then the worst recession since World War II, movements in production,wages or prices can be magnified out of perpective.
Despite recent burst of prices - inflation at the wholesale and retail level has been at a double-digit pace in recent weeks - and a sharp acceleration of growth, the outlook for the economy looks little different than it did a year ago, most experts say.
That means continued economic growth, falling unemployment, and inflation that is high but not accelerating. It also means that there is nothing "dramatic" the administration can do to reduce inflation or increase wmployment without engendering other "horrendous" costs, noted Daniel Brill, assistant Treasury secretary for economic policy.
For the short term, agreed Alan Greenspan, who was chairman of President Ford's Council of Economic Advisers, economic policy should be a "continuation of what we're doing now. And there is very little being done."
Of course, a year ago the experts did not foresee the prolonged slowdown in economic growth that began in April and continued until late 1976. During that nine-month pause, the unemployment rate rose from 7.3 to 7.8 per cent. But by the time Congress and the new administration decided it was time to do something about the pause, it had corrected itself.
Despite cold weather and natural gas shortages, the economy grew at an annual rate of 6.4 per cent in the first three months of 1977, and by last month the unemplyment rate had fallen to 7 per cent. The President suddenly withdrew the $50-a-person rebate he proposed in January to stimulate the economy.
In the short term - say for the next year or so persons should continue to find jobs at a rapid clip, although not as fast as in March and April when half a million citizens a month found jobs,a performance Commissioner of Labor Statistics Julius Shiskin found "fantastic."
And inflation should continue at a rate of about 6 per cent. That is a heady pace by pre-1973 standard, but acceptable when measured against the double-digit rate of 1974 or the 7 per cent clip in 1975. These calculations are based on a prospect if some disaster should strike American agriculture.
Shiskin cautioned that prices always rise during times of economic recovery. He warned against comparing the recent, temporary spurt of inflation with the double-digit variety that persisted in 1973 and 1974 and that ate up income gains for so many persons. If the recovery continues, as he said it should, prices will continue to rise, although not as fast as in recent months.
Short-term interest rates, which were stable for msot of 1976, have been climbing in recent weeks as the nation's central bank, the Federal Reserve system, tightens the reins of monetary policy.
But, noted Greenspan - who returned to his New York consulting firm of Townsend-Greenspan following Carter's inauguration - holding down the growth of the money supply now, when Treasury demands for funds are reduced and business cash demands are not yet large, will have no adverse impact on economic growth. It also will make it easier for the Fed to provide financing needs in 1978 without adding to inflation.
"We've gotten in the habit - although I am not sure it's good one - of looking at the underlying rate of inflation," noted Treasury's Brill. Aside from food and fuel - and "there's little we can do about the weather of OPEC (the Organization of petroleum Exporting Countries) - I don't see that inflation has gotten better or worse."
Some economist worry that the recent sharp increases in food and energy costs - which have been th prime movers behind the world's rising price level since 1972 - will force union bargainers to elevate their wage demands. If that happens, the acceleration in prices that has been isolated in food and fuel could spread into the economy as a whole.
So far, according to Sean Sullivan, who monitors labor market developments for the Council on Wage and Price Stability, union negotiators do not appear to be pressing for higher settlements. Wage and benefit settlements have been in the rage of 8 to 8.5 per cent for more than a year and do not appear ready to break out of the first 6 months of the year, which has helped reduce unemployment to a 29-month low, is expected to slow a bit in the last 6 months of 1977.
Some of the factors which contributed to recent big jumps in the so-called real gross national product - a desire by business to restock their inventories and an exceptionally low savings rate on the part of consumers - will not be quite so pervasive later in the year. But economists do not fore-see a serious slowdown in growth as happened last year.
Even so, the slower growth expected in the last six months means that there will be no further declines in unemployment, accoring to Alice Rivlin, head of the Congressional Budget Office.
Charles L. Schultze, chairman of President Carter's Council of Economic Advisers, disagrees.He recently said that the rate of unemployment could fall to as little as 6.6 per cent in 1977.
If the short-term prospects for the economy have a familiar ring, the long-run problems are not new either. The primary problem for the American economy is encouraging more investment on the part of business in plant and equipment. Not only does building plants and equipment create jobs now, but investment replaces out-moded and obsolete capacity and adds to the economy's overall ability to produce, which helps guarantee there will be no shortages of specific goods in the future.
But "the amount [of investment] we have been getting and the amount we will get is worrisome," according to Van Dorn Ooms, chief economist for the Senate Budget Committee. Much of the shortfall may be due of a steady erosion in business profits, after adjusting for the cost of replacing inventory and inflation, Ooms noted. That leaves businesses with fewer funds to invest.
Also, according to Greenspan, businessmen are uncertain about inflation and energy, as well as what course government regulation will take.
"We are in a period of risk aversion on the part of business," said the Treasury's Brill. "After a decade of oscillaness is reacting awfully cautiously." Even when their order books are filled, he said, and they should be thinking of expanding capacity, "they remember what happened when their order books were filled in 1974," he said.