Five Potential Potholes on the Road to U.S. Recovery

Last week's news that business inventories and industrial production are rising suggests the recovery is improving along the well-worn lines followed by previous exits from recession. Production and inventories rise, eventually driving improvements in employment. That in turn triggers a "virtuous cycle" of renewed consumer spending that powers further production increases, and so on. But unlike the previous recessions in 2001 and 1991, there are five potentially significant "potholes" in the road ahead, any one of which could thwart the recovery.