The economy's bad. Really bad. But it could be worse.
Though unemployment is at 8.5 percent and expected to rise even higher, a few signs of recovery are brightening a bleak landscape:
Home prices in February didn't drop as badly as had been expected; big banks are starting to turn a profit; the stock market appears to have halted last month's ghastly freefall.
So if the economy really is close to touching bottom -- and that's hard to conclude since the first quarter of 2009 saw it contract 6.1 percent -- or if it is already heading up again -- consumer confidence and spending is on the rise -- the big question is:
What did the Obama administration have to do with any of it?
Economists say President Obama and his administration nudged the economy in the right direction in his first 100 days in the White House. But whether his initiatives will have significantly sped up the natural recovery of the economy and whether those gains justify the massive deficits in the years to come, will continue to be the debate for the ages.
"You'll never absolutely know for sure, because we'll never know what would have happened if we hadn't done the stimulus," said James Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities. "There's an improvement in the sense that it looks like we're not heading for the really severe meltdown that people are afraid of."
Obama has won mixed reviews for his bold, yet risky, economic policies. Economists see the $787 billion stimulus package either as a necessary engine for job growth or a colossal invoice on future generations that could have been avoided. The financial bailout, inherited but expanded from the Bush administration, is seen as either the only way to get lenders lending or a wasteful handout to the very actors who caused the economic collapse.
Plus it's hard to score the direct impact of those policies so early on. The host of economic indicators used to gauge the recovery of the U.S. economy have been sending mixed signals for months.
As of late April, Obama officials as well as economists say they see the light at the end of the tunnel, though at this point it looks more like a pinprick in the ceiling.
Obama said earlier this month that the economy is showing "glimmers of hope." Treasury Secretary Timothy Geithner wrote in a column last week of "encouraging signs that the global economic downturn may be slackening."
It's hard to tell to what degree that language is a response to the backlash the Obama administration felt soon after his inauguration from critics who said he was sounding alarmist about the danger of economic collapse. Obama made a notable shift to optimism after that period.
Here's the good news:
New home sales fared better than expected in March, though they still fell by 0.6 percent last month, according to the Commerce Department.
Other real estate figures showed median home-sale prices in March, while down from a year ago, rising about $7,000 above February's numbers, with new homebuyers reportedly taking advantage of low interest rates and the $8,000 tax credit in the stimulus.
Construction of single-family homes also seemed to stabilize, based on March Commerce statistics.
On Wall Street, some banks are starting to return bailout money. And companies like Wells Fargo, Goldman Sachs and Citigroup reported better-than-expected profits in the first quarter of 2009.
Consumers are largely driving a comeback. Though businesses cut spending on equipment and software at a 33.8 percent pace in the first quarter, consumer confidence is on the rise and consumer spending rose 2.2 percent in the first quarter -- the strongest number in two years.
The Obama administration also claimed earlier this month that 2,000 transportation projects had been approved under the stimulus, "ahead of schedule." And a report by the Center on Budget and Policy Priorities showed, as of last month, that at least nine states had moved forward with plans to use stimulus funding to reverse or prevent budget cuts (though stimulus money is only expected to fill about 40 percent of an at least $350 billion shortfall for states over the next two and a half years).
But the bad news is still all there. Most notably, unemployment climbed to a 25-year high of 8.5 percent in March, and it could continue to rise.
New jobless claims also rose more than expected in the latest weekly report, showing the total number of workers continuing to file such claims topping 6.1 million.
General Motors, despite infusions of cash from the government, plans to shut down 13 plants over the summer and is teetering on bankruptcy despite a massive investment by the U.S. government.
With so many sectors in trouble, the International Monetary Fund estimates the global economy will shrink 1.3 percent in 2009. The U.S. economy will shrink 2.8 percent -- the most since 1946.
And despite the rapid approval of transportation projects, the construction sector lost 626,000 jobs from December 2008 to March 2009.
Though the stock market has rebounded since early March, the Dow Jones Industrial Average is still at about 60 percent of its value from a year ago -- and Obama presided over the fastest free fall of the Dow for any new president in at least 90 years, according to one Bloomberg study.
Geithner, even as he mined for signs of recovery, outlined the key trouble spots in his recent column in The Financial Times.
"The global economy is projected to shrink this year for the first time in more than six decades," he wrote. "The collapse of world trade is expected to be the largest since the end of the second world war. A global process of deleveraging is adversely affecting the availability of financing domestically and internationally. Job losses in the U.S. have topped 5 (million) since our recession began."
Economists, though, are cautiously talking about hitting bottom, careful to acknowledge that Americans will continue to take a beating for at least months to come.
"In a sense I think we might be past the absolute worst of it, but I think we're in the eye of the storm," said economist Josh Bivens, at the Economic Policy Institute. "I think we may be really near the bottom and a little more than halfway through it, but unfortunately we have a long way to go."
Bivens said he expects the stimulus bill in the long run to play a big role in job creation and increased consumer spending, with its money for infrastructure projects and funding for safety net programs, respectively. He was less convinced about the impact the bill's tax cuts would have. "The tax cuts are probably overwhelmed by people's desire to [save]," he said.
Horney, pointing to his group's study, said state budgets also have not been making the cuts they otherwise would have as a result of the stimulus bill, preventing further job loss.
But Robert Krol, economics professor at Southern Illinois University, said the stimulus is not going to be as effective as its supporters claim. And he said the tax cuts aren't permanent or big enough to have a significant impact.
"I wouldn't say the fiscal stimulus has no effect, but I would not give it ... a lot of credit in terms of a recovery in the second half of this year or next year," he said.
Rather, he said administration efforts to shore up the financial sector and Federal Reserve moves to slash interest rates will drive the improvements in the overall economy.
Bivens agreed that the Federal Reserve, by cutting rates and injecting more than $1 trillion into the financial system, will play a big role in loosening credit. He gives less accolades to the Wall Street bailout.
Even if the economy shows huge gains later this year, Obama's economic policies will undoubtedly be a magnet for criticism in the months and years to come, as they represent a seismic shift toward government expansion and intervention.
Republicans generally doubt Obama's commitment to halving deficits and the national debt down the road.
His meeting with Cabinet secretaries aimed at slashing $100 million from the budget was seen as a half-hearted attempt at fiscal discipline -- since that figure represents a micro-fraction of Obama's overall budget plan.
House Minority Leader John Boehner said last week that the Democratic policies, including the health care and energy plans in their budget blueprint, will only hurt the economy and hurt jobs.
"The stimulus bill was supposed to be about jobs, jobs and jobs, and it turned into spending, spending and more spending," Boehner said. "And then we've got this budget. ... And the fact is, we've got trillion-dollar deficits in his budget proposal for as far as the eye can see."