American Consumers: You Are On Your Own

Familiar avenues for boosting growth seem to have no prospects for jumpstarting the recovery.

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It has become a cold world for the U.S. economy, and the coming summer holds little promise of heating things up.

The bleak figures keep adding up. The most recent jobs report was a stunning disappointment, growth estimates have been revised downward, and global worries spanning both Europe and Asia create global uncertainty. All of those problems have helped to pull the Dow down more than 900 points over the last month.

[Read how bad jobs numbers boost the chance of QE3.]

As the government and central bank run out of options, prospects for an improved recovery are in short supply.

"I think unfortunately, to a large extent, it's out of our control." says Aaron Smith, senior economist at Moody's Analytics, of the nation's economic prospects.

"[The Fed is] running very low on ammunition when it comes to their ability to shore up growth," says Smith. "[And] anything positive on the fiscal front, meaning some clarity with respect to how much fiscal tightening is going to take place early next year ... I think that's wishful thinking ahead of an election."

Indeed, the Fed has tried many options: holding interest rates at record low levels while announcing a willingness to keep rates low until late 2014.

It's hard to foresee help from the fiscal side, as well. In fact, a "fiscal cliff"—a massive confluence of expiring tax breaks and spending cuts—lurks at the end of the year, threatening to rein in growth even as it reins in deficits.

Stocks have tanked, businesses are pulling back on hiring, the recovery refuses to accelerate, and government is hard-pressed to boost demand. Domestically, the solutions are slim, while foreign countries are also weighing on U.S. prospects.

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Europe is perhaps the loudest threat right now, with Greek elections—and a potential Greek exit from the euro zone—looming. An E.U. meltdown would mean turmoil in the global financial system. But problems elsewhere also demand attention: growth in emerging economies like China and India has decelerated, threatening the global economy.

A slowdown from many large foreign economies means reduced demand for U.S. exports. That demand is also threatened as the dollar strengthens, making U.S. products more expensive abroad.

And whether or not the risks posed by troubles abroad are in fact that big, it matters that investors perceive them as dangerous, says Mark Luschini, chief investment strategist at financial services firm Janney.

"A lot of what happens, as we know, in the financial markets, is born out of uncertainty, and it is very hard to quantify what that means, so it can lead to extreme reactions," he says.

Despite the pileup of problems, the U.S. is still skirting disaster...for now.

"We see the U.S. recovery continuing—fairly slowly but picking up as the year progresses," says Bill Witherell, chief global economist at Cumberland Advisors.

[Read analysis of the latest dismal jobs numbers.]

Projections released late last month from the OECD, a Paris-based think tank, predict that U.S. growth will both accelerate slowly and, through the end of 2013, outpace that of all OECD countries taken together.

Domestically, a couple of bright spots could mean an economic boost­—­that is, if Americans are willing to spend. Smith points to lower mortgage rates making home purchases more attractive, alongside low gas prices that could increase consumer spending elsewhere.

Witherell says that low gasoline prices can provide significant economic fuel.

"Gasoline is a significant portion of American consumers' budget, so to the extent that the lower prices we have now hold, that will be like a tax cut for Americans and should be a plus for the consumer, and particularly for companies that depend on people driving, like tourism, in particular," he says.

Of course, that boost could be very short-lived, thanks to price volatility. "Looking out again six months and later, we'd be surprised if oil prices are still as low as they are today," he says.