Dennis Morrison, Financial Gleaner Columnist
Just as it appeared that financial markets in Europe were stabilising and that economic growth in the United States was accelerating, some negative factors have come to the fore.
Tensions have again returned to European financial markets set off by the hike in Spain's borrowing costs, which is being interpreted as a threat that the eurozone may be forced to undertake a bailout of the region's fourth-largest economy.
Were this to happen, it would require a scale of intervention that would be unprecedented, and hence there are fears that this could lead to an intensification of Europe's debt crisis.
While Europe's debt problems are threatening again, the US economy, which had shown encouraging signs in recent months, turned up a disappointing jobs report for March.
The new jobs figure for the months was only 120,000 - about one-half of the monthly rate for the previous five months. In reaction, stock markets have lost some ground, particularly in the US, where the Dow Jones Index had risen significantly since the start of the year over the psychologically important 13,000 mark.
Recent reports had shown that the American economy registered important gains, with GDP growing faster than was estimated, and with strong monthly job growth since the latter months of 2011.
Consumer spending jumped in February to the fastest rate in seven months, and retail sales registered big gains for the same period.
But there is now some concern that the anticipated pick-up in economic activity may not materialise, repeating a pattern seen in 2010 and 2011.
Rising gas prices - at historical highs for this time of year - have also raised concerns among businesses that are worried that should these be sustained, they could be a drag on consumer spending in the coming summer months.
Against this are the findings of a recent survey of business conditions by the US Federal Reserve that suggest that the dip in job growth in March may be only a blip.
According to this survey, there was increased hiring in nearly all regions of the country.
Manufacturing, shipping, information technology, and professional business services, were the areas of biggest job gains in the period from mid-February to early April.
Activity in the manufacturing sector was particularly strong as rising auto sales and demand for machinery and other equipment boosted factory output while hiring in the sector proceeded at an increased pace. Given the positive tone of the Federal Reserve Survey of Business Conditions, it is expected that the central bank will not likely relax monetary policy in the coming period.
The threat of a debt crisis in Europe could dominate economic events and reverberate around global financial markets, as it did in the latter part of 2011.
Investors are expecting that the European Central Bank (ECB) will act to avert such a crisis, and there are indications that the possible method of intervention is already being considered.
Meanwhile, the authorities in Spain are poised to undertake the deepest austerity measures in three decades involving tax increases and cuts in public expenditure.
The effectiveness of this policy mix in dealing with Spain's economic problems is still being disputed.
Earlier rounds of austerity measures have contributed to a contraction in output and skyrocketing unemployment, which is now nearly 24 per cent.
Greece, Ireland and Portugal, which have also implemented economic austerity measures in return for ECB/IMF bailouts, have experienced similar results.