Add a manufacturing slowdown to the growing risks facing the world economy.
High input prices, supply chain disruptions from the tsunami disaster in Japan and slowing demand from China have combined to brake manufacturing momentum in Europe, the United States and Asia in recent months following a steady run of robust growth.
Just how sharp the slowdown is will become clearer this week with the release of data from factory purchasing managers in major economies across the globe.
In the euro zone, where divergence between core and peripheral countries has been the story for months, signs of more broad-based trouble emerged last week. A preliminary manufacturing index for May posted its biggest one-month fall since the collapse of Lehman Brothers in 2008.
That reading is expected to be confirmed on Wednesday, as are factory slowdowns in the United States and China, where curbs on bank credit and power shortages have slowed growth, adding to worries about the world's second-largest economy.
Driven by higher energy prices, costs for the U.S. manufacturing sector rose to their highest level in nearly three years last month. A nascent slowdown in the sector, due in part to poor weather, has been blamed for an uneven labor market recovery.
U.S. companies created jobs at their fastest pace in five years in April. But May non-farm payrolls data due on Friday risks disappointing after a surprise rise in U.S. jobless claims last week highlighted persistent hurdles in the labor market.
Economists polled by Reuters expect U.S. payrolls to rise by 185,000 in May, down from April's 244,000 expansion, with the unemployment rate edging down to 8.9 percent from 9.0 percent.
That compares unfavorably with the labor market in Germany, where the unemployment rate is forecast to dip to a post-reunification low of 7.0 percent this week.
This is a delicate moment for the global economy, and the crisis is not over until our economies are creating enough jobs again, said Angel Gurria, secretary general of the Paris-based Organization for Economic Cooperation and Development.
There is also some concern that if downside risks reinforce each other, their cumulative impact could weaken the recovery significantly, possibly triggering stagflation in some advanced economies.
The OECD raised its 2011 growth forecasts for the United States and Germany last week but slashed its forecasts for Japan to reflect the devastation from its earthquake-tsunami-nuclear triple disaster.
It now expects economic contraction of 0.9 percent this year and has warned that a slow recovery in Japan could threaten its partners if global supply chains remained disrupted.
In Europe, the focus remains on Greece's woes after Prime Minister George Papandreou's government failed to forge a consensus on austerity measures with opposition parties.
European governments are reluctant to pledge additional aid to Greece without broader political backing for reforms, which include aggressive privatizations to meet fiscal targets set in the EU/IMF bailout Athens secured one year ago.
Without more European money, the IMF has said it will not release its portion of a June aid tranche that Greece desperately needs to avoid a debt default.
The stand-off highlights once again the continued lack of a cohesive policy response to the region's crisis, Capital Economics said in a research note.
Meanwhile, the latest batch of euro-zone business surveys brought the strongest signs yet that growth in the core economies may be starting to slow. With the periphery still struggling, the second half of 2011 could prove pretty tough for the region as a whole.
(Writing by Noah Barkin; Editing by Dan Grebler)