Flirting With a Repeat of a Stunted Recovery

By DAVID LEONHARDT
NYT

WASHINGTON

It’s a strange moment for the economy. Just when it is picking up speed, the risks of another slowdown are also increasing.

On the positive side, exports and consumer spending are up, and the job market finally seems to be improving. If anything, last week’s jobs report probably undercounted recent gains. That often happens early in an economic recovery because the Labor Department has a hard time keeping track of newly started businesses.

On the negative side, oil prices have risen more than 40 percent since September, and every level of government is considering spending cuts and layoffs.

All in all, the situation is uncomfortably reminiscent of last spring. Back then, companies were just starting to hire again, before a combination of events — including Europe’s debt crisis and the fading of the stimulus program here — spooked them and cut short the recovery. It’s easy to imagine how energy costs and government cuts could do the same this year.

(More here.)