Is the U.S. economy heading for another 'Spring Swoon'? That's the question a lot of economists are wondering -- and worrying about -- ahead of Friday's critical April jobs report.
Thursday brought another round of economic data confirming the economy is downshifting, the big question is how fast.
Most troubling, ISM manufacturing fell to 53.5 in April, below expectations and its lowest level since December.
"'Respondents' comments affirm the slowing rate of growth," the Institute of Supply Management said in a release accompanying the report. "In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs."
The ISM data follows the weaker-than-expected report on first-quarter GDP, and the most recent reports on durable goods, ADP payrolls and auto sales, which all disappointed.
On the other hand, gasoline prices have fallen for two-straight weeks, the ISM services data was better-than-expected and Thursday's weekly jobless claims data showed an unexpectedly large drop of 27,000.
In sum, the data are mixed with a decided bias to the downside.
The conventional wisdom is the U.S. economy will continue to muddle along in the low 2% range, which is certainly better than recession but not nearly strong enough to make a dent in the unemployment rate.
For April, the consensus is the U.S. economy added 160,000 jobs while the unemployment held steady at 8.2%. Judging by the recent data, there is downside risk to consensus although the econo-bulls were encouraged by the big drop in weekly jobless claims.
In the accompanying video, I go inside the numbers with our economics editor Daniel Gross, who notes consumer spending added 2.8% to growth in the first quarter. Considering the overall number was 2.2%, that means the business investment and government activities were an overall drag on economic growth.
In 2009, 2010 and 2011, economic growth, however modest, was based largely on a rebound in business spending and investment. The big question now is whether the U.S. consumer can take the proverbial baton and keep the recovery afloat.