By Bernie Becker - 02/26/13 03:47 PM EST
But at the same time, that increased confidence about future conditions is coming just as Washington is locked in another partisan fiscal stalemate. Without congressional action, some $85 billion in automatic spending cuts will start going into effect on Friday.
The White House has warned that sequestration would be deeply harmful to the economy, citing projections from the Congressional Budget Office that the cuts could mean 750,000 fewer jobs this year.
Many Republicans have also said the cuts are poorly designed and would be harmful, but the two sides disagree on whether new tax revenues should be used to replace the cuts and appear far apart on a potential solution.
Democrats have acknowledged that the pain from the automatic cuts may not be felt immediately, something Republicans could latch on to as they try to make their case for more spending cuts.