America is hiring again, unemployment figures are dropping and the Dow Jones industrial average flirts with pre-crisis highs. An unexpected retail boomlet heartens Britain as inflation tumbles. And against all expectation, the French economy grew in the last quarter.

Is this the long-awaited recovery? Have business people finally rediscovered what Keynes called their "animal spirits?" Is the 4-year nightmare finally over?

The answer is probably yes and no.

Behind the encouraging U.S. employment figures stand an alarmingly large number of people who have given up looking for work and have thus dropped out of the official jobless numbers. In 2006, the United States had almost 70 percent of its adults in the labor force; today, fewer than 65 percent of adults are working or prepared to work.

Behind the hopeful French and British figures stands the fact that French car sales fell 20 percent last year and factory closures loom as Europe prepares for the long-delayed consolidation of an over-supplied industry. Moody's put Britain's coveted AAA credit rating on negative watch last week. And the German economy appears to have stopped growing.

The economic tea leaves are difficult to read. But there are underlying forces that will affect the future of the U.S. and European economies that can be measured reasonably well. We know, for example, that Germany, China and Japan face a demographic nightmare, with more than 30 percent of their populations over the age of 60 less than 20 years from now.

By contrast, the United States and Britain and France all face much healthier demographic futures, with rising numbers of people in their workforce and relatively fewer retirees to support.

But as Keynes said, "in the long run, we are all dead." We need to look closer to the present day to assess whether these green shoots of recovery are likely to prosper or to wither.

And one plain conclusion stands out. The U.S. recovery is based on something new, important and real. The European recovery appears to be based mainly on the way the European Central Bank has started printing money and lending it to European banks at 1 percent interest for three years. Faced with the prospect of serial liquidity crises among European banks, it made more than half a trillion dollars available in December and will do the same this month. Europe's recovery, if such it be, thus seems to be built on fairy gold.

By contrast, the American recovery is being boosted by what we can only call a revolution in U.S. energy dynamics, which brings in its wake dramatic implications for the U.S. trade deficit, for climate change and foreign policy.

Six years ago, the Department of Energy reckoned that the United States had fewer than 10 years reserves of natural gas. Now it reckons the country has well more than 100 years and the liquefied natural gas terminals that were being built to import the stuff are being re-engineered to export it instead. The first $5 billion contract to export U.S. natural gas (to Britain) has already been signed.

The relatively new technology of hydraulic fracturing, or "fracking," means that oil and gas that was once locked unobtainable in shale rock formations can be exploited commercially.

The gas alone would be a miracle but there is also a Klondike-style boom under way in the Dakotas and Wyoming as the shale oil being taped has boosted U.S. oil production to its highest level for eight years.

A report from Citigroup suggests the United States could achieve energy independence by the end of this decade and since half the trade deficit goes to pay for imported oil, which is a revolutionary change.

It also means the Middle East drops way down the priorities of U.S. foreign policy.

But this home-grown oil and gas isn't just energy; it is also feedstock, spurring a $4 billion investment boom in the U.S. chemical industry. A report from PricewaterhouseCoopers for the National Association of Manufacturers says the cheap natural gas will save $11 billion a year in U.S. manufacturing costs over the coming decade and deliver more than 1 million new jobs and increase disposable income by $2,000 per year in every American household.

The Energy Department's Institute for Energy Research says the United States has sufficient recoverable natural gas to meet the demand for electricity production for the next 575 years. And the gas is much cleaner than the coal now being used to produce most electricity, pumping on about 38 percent of the carbon dioxide into the atmosphere that coal goes.

At the current rate at which power stations are being re-engineered to run on gas, the United States looks as if it might by 2020 achieve those Kyoto Protocol targets for cutting carbon dioxide emissions to which it never signed up.

This is a game-changer and it contains a promise that the current signs of a U.S economic recovery are built not on the sand of easy money, like the Europeans, but on oil- and gas-bearing rock.