There are two battles going on that will influence how the economy performs for the rest of this year. The first is a battle for attention between the general economic news and the profits performance of America’s leading companies. The second is a battle between austerity advocates and the more-stimulus-please-sir, crowd. In a sense, this latter war is between Europe and Britain, on the one side, and America on the other.

Start with the first battle. The news about the economy has diminished hope that the economic recovery will be rapid and robust. A slowdown in private-sector job creation is producing talk of a “jobless recovery” that, along with the persistent refusal of the housing market to recover, is damaging consumer confidence, which is why the latest GDP report shows that “consumption is sluggish,” to borrow the description of Goldman Sachs’s economists. Home sales are at near-record lows, and the supply of unsold homes, including foreclosed homes, is rising. Some 60 percent of housing analysts are expecting home prices to decline this year, despite a recent up-tick due to the now-lapsed availability of a buyers’ tax credit. It is difficult for consumers to have a bounce in their step as they walk down a street with foreclosure signs, and fret that they might be next in the unemployment queue, perhaps unable to meet their mortgage payments.