Economics: A quick scan of recent data might suggest that the economic upturn started last summer and ended around Christmas. Internationally, recent figures from the US jobs market have been poor, raising fears about the sustainability of the US recovery.

After a brief spurt in confidence indicators late last year, the euro zone economy is not showing many signs of life. And at home, figures this week showed a big drop in exports to the US in January and a surprise fall in retail sales volume in the same month. So just what is going on?

The view of analysts vary from those who see recent setbacks - such as the poor US job figures - as mere speed bumps on the way to recovery, to the more gloomy seers who are starting to pull on their beards.

The recent data seem no reason to panic - particularly in light of the extraordinarily strong performance of the Irish jobs market last year. However, they do raise questions about the likely pace and shape of the recovery.

Internationally, there is no doubt that the US holds the key, with euro-zone growth weak and only the beginnings of recovery in Japan. In the US, the worry is that the turbo-charged 6 per cent annual growth rate in the second half of last year is not translating into a big uplift in new jobs.

For the moment, US companies seem to prefer to spend on capital investment, rather than on increasing staff. In turn, this raises doubts about the sustainability of consumer spending - a key factor underpinning the US economy in recent months.

This is why the monthly US jobs figures - published on the first Friday of each month - are now the key indicator for the markets. February's anemic 21,000 increase was a particular disappointment; if this figure doesn't start to pick up in the next few months then concerns will rise.

Common sense would seem to suggest that hiring should start to accelerate. US companies have moved back strongly into profit, helped by the falling dollar, and cash flows are strong. A revival of investment should be followed by a pick-up in employment, notwithstanding the drive to increase productivity and the "offshoring" of some operations to lower-cost locations.

The reliance on the US to drive international growth carries some risks. Jobs growth could falter and the US recovery could run out of steam. And the US current account balance of payments deficit - now around 5 per cent of gross domestic product - remains a concern. It leaves the US reliant on foreign investment flows and threatens to continue undermining the US dollar.

The dollar's weakness is obviously taking a toll on Europe's exporters and is threatening to snuff out what little buoyancy was evident in the big euro-zone economies. Hopes of a euro-zone revival were based on a continued revival of exports, the main contributor to the pick-up in the second half of last year.

However, recent industrial production and activity indicators suggest that the weak dollar is starting to have an impact on export sales. German growth forecasts are being revised down and the euro zone's biggest economy may not grow by much more than 1.5 per cent this year. A German government minister described the economy as "fragile" this week, which pretty much sums it up.

Meanwhile, the European consumer refuses to open up the wallet , with confidence and spending remaining subdued. The impact of the Madrid bombings on consumer and business sentiment is difficult to gauge. Forecasters point to the rebound in the US economy following 9/11, but equally the uncertainty before the Iraq war had a clear impact on worldwide confidence, showing the potential impact of geo-political events.

The uncertainty about the US and EU economies inevitably clouds the outlook for the Irish economy. Up to recently, signs have been positive, with a clear pick-up in consumer and business confidence, strong jobs figures, falling inflation and signs of a revival in manufacturing. Growth has certainly taken on some momentum - the question is how robust it will be.

Two indicators this week were disappointing. Data from the Central Statistics Office showed a drop in consumer spending in January - by 6.7 per cent in volume terms from December excluding car sales. This is mysterious, given reports of a strong sales season. But at best it indicates that, despite improvements in confidence surveys, consumers remain cautious when it comes to spending (except on houses, of course, where borrowing continues merrily higher).

Meanwhile non-EU trade figures showed a 42 per cent drop in exports to the US in the year to January. One-off factors may have affected the data, but there is no doubt that Irish exporters are being hurt by the rising euro.

It would be a mistake to write off the recovery. The momentum is still there in the US - albeit with the caveat of the jobs market. However the speed and extent of the international upturn is now in question. And so is the ability of the euro-zone economies to gather momentum, with the aftermath of the Madrid bombing providing another uncertainty to an already-fragile outlook.

The Irish economy has been remarkably resilient through the past couple of difficult years and - despite losing competitiveness in some sectors - is well-placed to benefit from whatever international growth there is. However, forecasts late last year of a clear path to a strong and sustainable international recovery now look a bit optimistic.

Reasonably buoyant US growth should still save the day, but it all looks a bit messier than it did at Christmas.