So far, it has been the dog that didn’t bite.

When the federal spending cuts known as the sequester went into effect March 1, President Obama and many others predicted the economy would tank. It didn’t. Consumers remained surprisingly willing to spend. Employers continued to hire. The stock market hit several new highs.

It's now beginning to appear, however, that the sequester is more of a slow-release drag on the economy than the fast-acting depressant some economists predicted. Job growth has slowed again, as it has during a “spring swoon” that occurred during each of the past three years. Forecasters have been reducing their expectations for second-quarter GDP growth. And investors who were ebullient just a couple weeks ago are now back to their usual skittish selves.

Every loss must be felt

The sequester was never likely to be catastrophic, since it amounts to less than $100 billion in annual spending cuts in a $16 trillion economy — less than half a percentage point of total

By Terry Connelly

As May was about to end, a spate of reasonably positive news about the pace of the US economic recovery – especially rising consumer confidence, home prices, durable goods orders and new hiring – helped invalidate for 2013 one of Wall Street’s oldest maxims: “Sell in May and go away.” All the hedge funds and their acolytes in the small-time analyst community (who had been trying for months to talk down the markets so those funds could “catch up” with their benchmarks like the S&P 500 on the cheap) were getting close to throwing in the towel.

The old scare stories that had worked so well in the past three years just were not working.

Europe and the euro were not imploding. Nasty recession, yes, but existential crisis, no. The US was not being pushed back into recession by the famous Sequester. The debt ceiling issue was put off until late September at the earliest. Syria is a mess, but it doesn’t have oil, so no shock jump in gas prices, just the usual spring refinery