The US economy is billions of dollars and 1.7 million jobs stronger than we were twelve months ago. But the same headwinds that doomed last year's recovery are swirling again.
Let's play "Name That Year of the Recovery." In the first quarter of this Mystery Year, the economy adds more than 200,000 jobs in consecutive months. Manufacturing is roaring. Investors are giddy and stocks improve for the third month in a row. The Dow breaks 12,000 for the first time since 2008. Economists are screaming, "Recovery Winter!"
Surprise! It's 2011. The economy accelerated around the '10-'11 bend with practically every conceivable tailwind: accelerating employment, strong industrial production, and a decent, if spotty, normalization in housing.
But you all remember what came after. Unrest in the Middle East sent oil over $100 a barrel. Europe's crisis weighed on banks, confidence, and exports. A showdown over the debt ceiling made a mockery of Washington. By the summer, the boomlet has wilted, job creation has slowed to a pathetic trickle, and economists were talking seriously about a double-dip recession.
Fast-forward to 2012. The economy has added more than 200,000 jobs in consecutive months. Manufacturing is roaring. Investors are giddy. Stocks have hit 2008 highs. Economists are screaming, "Recovery Winter!"