They lost five of their ports to the US
During war time most male citizens are employed (If the waring country uses conscription) which lowers the national unemployment rate. Factories for non essential items will start to switch into making products for war use which makes businesses boom and grows the national economy. Also employment rates rise again due to the factory workforce hiring women and men who cant fight in war to work in the factories. War-bonds fund the government aswell, because citizens buy them in a way to "loan" their government to support the war effort which raises their military budget. The development of new technologies can also lead to economical prosperity.
A great example of this is the United States during the Great Depression when unemployment rates were at a all time high. Once Japan declared war on the United States, unemployment rates were back to normal due to conscription being implemented for male citizens. The females also worked in the factories creating munitions and arms for the war effort.
The confederacy had better leaders. I hope this helps.
