(FORTUNE Magazine) – This recession is probably on the way out. American manufacturing, where the trouble began more than a year ago, is starting down the comeback trail. U.S. consumers, according to those confidence surveys, have regained their bearings after the shock of Sept. 11. Stock markets have been on a roll for three months now.

Don't get too excited, though. Recovery may be on the way, but that doesn't mean sunny skies are here again.

You may have heard this warning before, with the explanation that depressed economies overseas, high consumer indebtedness, manufacturing overcapacity, the economic drag of antiterrorist security measures, something called "the liquidity trap"--you name it--are going to hold the U.S. economy back. All these arguments may well have merit, but they involve predictions about how the economy will perform in the future. And we all ought to know by now what economic predictions are worth.

No, the argument here is simpler: While a recovery is certainly preferable to a recession, it's still usually painful at first. Consider the term used by the recession arbiters at the National Bureau of Economic Research for the end of a downturn: trough. That means the economy has hit bottom, and also that it has some serious climbing to do before conditions feel anything like they did during the last peak, before the recession started.

The most obvious example of this is the unemployment rate, which usually keeps rising well after the end of a recession as companies search frantically for ways to regain lost profitability. (For more on unemployment, see "How Bad Is the Recession?") In the early years of the last expansion, the combination of economic growth with continued high unemployment was seen as something of a new national plague in the U.S. Remember that endless New York Times series on "The Downsizing of America"? That was published not during some horrible downturn but in the spring of 1996, at the midway point of what turned out to be the longest U.S. expansion ever. (It wasn't just the Times; FORTUNE ran its own dire cover story on layoffs at the same time.)

Then there's the housing market, which has been charging to new heights in the midst of the recession, thanks to low mortgage-interest rates and, so far, low unemployment. If unemployment keeps rising and interest rates head upward as well, housing sales and prices will have to come under pressure.

This is not intended as an exercise in doom and gloom. Some economic sectors will probably do fine over the coming months. In fact, the services-dominated U.S. economy may well have evolved to the point where its general direction is invariably upward--recessions are far less frequent and severe than they were 100 or even 30 years ago. But even a growing economy will see its share of good times and times that aren't so good. We miss the point when we focus exclusively on "recovery" or "recession." Last spring a lot of economists and journalists (including this one) spent far too much time arguing about whether there was going to be a recession (the definition of a recession is six straight months of economic contraction, as determined by a panel of economists at NBER who look at GDP and a litany of other indicators) when it was obvious to almost everyone else that, recession or no, the implausibly good times of the late 1990s were over.

So without making any actual forecasts about unemployment, GDP growth--or any of those other numbers that Wall Street economists get paid lots of money to churn out and then promptly revise--we can still confidently predict what the next couple years will look like. Millions of smart, talented people won't be able to get the kind of work they're capable of doing. Lots of recent college graduates will spend years waiting tables or manning ski lifts or moping around at home trying to figure out what to do with their lives. Social challenges like welfare reform and improving public schools, which seemed to have been magically resolved in the late 1990s, will turn out to still be around and in need of drastic action. Worrying about the deficit and the national debt will come back into fashion. And don't be too surprised if concern about U.S. competitiveness (vs. Japan or Europe or China or India) stages a comeback as well.

No, we're not about to relive the early '90s (although Pearl Jam is probably due to make a comeback one of these days). But it's important to remember that there's a world of difference between a "recovery" and a "boom."

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