It depends what you mean by recovery. There are hopeful signals, but they are still drowned out by the evidence of deepening recession in the United States and Europe. Our economies are still shrinking, and job losses will continue throughout this year. U.S. retail sales dipped 1.1 percent in March, the biggest decline in three months and notably worse than the 0.3 percent increase that analysts had expected.

U.S. industrial production fell again in March so that for the first quarter as a whole, output dropped at an annual rate of 20 percent. The capacity-utilization rate for total industry fell further to 69.3 percent, a historical low since these statistics began back in 1967.

Some earlier hopeful signs, like the unexpected rise in exports in February, were misleading. The February rise in exports was mainly driven by pharmaceutical products. The Federal Reserve Board's latest industrial-production report -- released April 15 -- found that pharmaceutical output reversed, falling by 1 percent in March.

The unexpected rise in new housing starts in February, which inspired hope that the U.S. housing market was reviving, went into reverse in March, dropping 11 percent from an annual rate of 572,000 to 510,000. By contrast, new housing starts peaked in January 2006 at 2.27 million, so we have seen a 75 percent drop. Building permits, an indicator of future construction, fell 9 percent in March to 513,000.

Rising unemployment across Europe, Asia and the United States means fewer paychecks and less consumption in the future. Jobs in the United States continue to be lost at a rate of 8 million a year. Credit card defaults hit a 20-year high in March and look to worsen. Capital One announced that its net charge-off -- loans that will not be repaid -- hit a record 9.3 percent in March.

Unemployment rose again to 8.6 percent in Germany despite government subsidies for part-time work. The rate in France was 8.6 percent; in Italy, 6.9 percent, and in the United Kingdom, 6.4 percent. Worst hit was Spain, not surprising in an economy where almost 20 percent of GDP was in the construction industry during the building boom, where unemployment tops 15 percent.

The continuing contraction in the world's two biggest markets, the United States and the European Union, does not promise well for emergent countries hoping for export-led growth. The Organization for Economic Cooperation and Development said the GDP of Japan will shrink by 6.3 percent this year. It said GDP in Germany will contract by 5.3 percent and in United Kingdom by 3.7 percent while GDP in the United States drops by 4 percent.

Those four leading members of the G7 account for half of global economic activity. Their average GDP fall of 5 percent means $1.25 trillion being removed from global economic output this year and probably more than that from global consumption, given the need of U.K. and U.S. consumers to reduce debt and build savings. That means a significantly smaller export market for emergent economies to target.

But there will be a recovery this year because a tidal wave of deficit spending, more than $2 trillion, is being pumped into the global economy by the governments of the United States, Japan, China and Europe. And central banks are printing money at an extraordinary rate. In the United States, the Fed's balance sheet has tripled to more than $2.3 trillion in the course of 12 months as it pumps liquidity into the banks and credit market.

In addition to the $586 billion stimulus package announced by the Beijing government last year, China's banks have been ordered to lend. And they certainly obeyed. In the first three months of this year, Chinese banks lent $700 billion -- more than they lent in the whole of last year.

Under this kind of stimulus, a corpse would get up and start to dance. And the collapse in world demand in the last six months was so steep that manufacturers slashed production, so now inventories have to be rebuilt.

There are three main reasons to fear, however, that this recovery cannot last and that instead of the usual V-shaped or U-shaped recession, this one will look more like a W.

The first fear is that the economy will slide again next year when the deficit spending runs out. The question is whether the world's governments have the political will to continue the deficit spending and whether the world's bond markets will buy the flood of government debt that is being auctioned -- and at what price. Last week, the U.S. Treasury had to boost its interest rate to 3.3 percent to sell $14 billion of 10-year bonds.

The second reason to question whether the recovery will last is China, where the official figures showing growth at a rate of 6.1 percent in the first three months of this year are looking more and more suspect. Electricity output declined in the same period by almost 6 percent, so analysts question how China can grow without power, particularly when government spending is going into the power-hungry construction industry.

But the biggest reason to fear that this recovery may not be sustainable is that the world's financial system has not yet been fixed. The banks are still in deep trouble. The International Monetary Fund reported this month that a total of $4.1 trillion will have to be written off by the world's banks, and so far they have written off barely a quarter of that. The United States is in slightly better shape. Its banks have written off half of their losses, but Europe's banks have so far written off less than 20 percent of theirs.

It is hard to see how a recovery can be sustained unless and until the banks are stabilized. This means somehow resolving the problem of their toxic assets, even as the recession in the rest of the economy is adding to the banks' burdens by making more and more of their loan book appear problematic. The banking problem keeps on getting bigger as the economy gets smaller.

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