We are still in the woods and it's getting later in the day. The economic landscape is looking smoother, but there are a lot more obstacles before we get back on track. The good news? We have everyone's attention. The bad news? Everyone is sending conflicting signals.

There are major issues that are not resolved that could lead us into a repeat of the extended recession seen in 2001-02. That would be bad enough, except that this recession is already deeper and broader.

The first major issue is the consumer. Consumer confidence is not high enough to signal any significant change in the level of consumption. That attitude is reinforced by the level of bankruptcies, mortgage foreclosures and unemployment. Any one of these would be a problem for consumer confidence, but these are just three of the headline-grabbers.

Going through the summer, we will likely see an increase in foreclosures from April and May while unemployment is expected to continue growing until the end of this year. Small business bankruptcies will increase in the next few months as those barely hanging on will no longer be able to get working capital as interest rates rise along with credit standards. Make no mistake, banks will not loan to at-risk clients due to the significant repercussions from federal oversight. Furthermore, banks will be required to obtain larger pools of reserve capital than they currently have, which diverts funds from loans. There is no relief in sight until much later this year.

The next major issue is the role of inflation. A year ago, diesel fuel was over $4.50/gal. At the time of this writing, it's above $2.50/gal. That should be great news for motor carriers as well as consumers as gasoline has had nearly the same size decline. However, it is more about what is happening now than a year ago. In the past five months, fuel prices are up 7%, and heading higher. Both motor carriers and consumers are spending more of their disposable income for fuel and not for other goods and services. Rising interest rates will further reduce disposable income. Inflation is being held in check, in part, by downsizing the quantity of goods and services sold. A doctor's visit is shorter and products include fewer frills, but there's been no change in price from a year ago — that is a form of inflation.

It is estimated that there will be 6.3 million unemployed at year's end. Hard to see how that helps to spur consumption, but economists do show consumer spending up in the fourth quarter. The President has said that the stimulus package will add/save 600,000 jobs by year end. That leaves 5.7 million looking for work and another 2 million not looking for work because they were unable to find jobs. The employment structure will appear to be more part-time and less skill-based than before. In addtion, baby boomers will forego retirement and take on part-time work to supplement their incomes. The federal agency charged with insuring pension funds had an $11 billion deficit at the end of fiscal 2008, without the auto sector charges. In sum, there may not be enough cash coming into households to sustain a recovery.

Home-building permits came in at 494,000 last April, down from 2.2 million in January 2006. Household wealth declined $11.1 trillion during 2008 and has not stopped declining since. Where is the growth going to come from?

Small-business formation has been one of the mainstays of any economic recovery; however, capital is needed to start and sustain a business while in its formative stage. No such luck this time around.

Recovery is all in the eyes of the beholder.