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NEW YORK (CNN/Money) -
After cruising along for much of 2004 and the start of this year, the U.S. economy may be having engine problems.
Economists and investors who were confident about the pace of growth only a week or two ago are suddenly much more concerned about a slowdown in the months ahead.
As the first-quarter earnings reporting period speeds up next week and key economic reports are released the next two weeks, there will be talk about whether factors such as high gas prices and rising short-term interest rates could choke off growth in the months ahead.
"We've seen a sea change in the way the financial markets and economy watchers are looking at the world," said Anthony Chan, senior economist with JPMorgan Fleming Asset Management. "For many months, people thought the economy was so strong and robust, they could ignore these head winds."
"But what we've seen is if you hit the economy over the head enough times with higher energy prices and short-term interest rate hikes, it reacts."
The last week brought a much weaker-than-expected retail sales report for March, a record $61 billion trade deficit for February, as well as disappointing earnings from IBM (Research) that hit the tech sector -- and the broader market -- Friday.
Lackluster reports on consumer confidence and manufacturing Friday also worried markets and economists.
Suddenly there is talk that the Fed might have to at least pause its policy of regular quarter-point rate hikes at its June meeting due to weakness, said economist Greg Valliere of the Stanford Washington Research Group. He said a week ago the debate was whether the Fed would get more aggressive on hikes to cool off the economy and inflationary pressures.
"That's a really dramatic shift," he said. "The fear in the market (is) we're looking at less robust growth than people were thinking only a month ago."
Neither Valliere nor Chan say they think that the economy will actually go into recession with a negative reading on gross domestic product. But many estimates for second quarter GDP are being lowered to the 2 to 3 percent rate, rather than growth of close to 4 percent seen in earlier forecasts.
That's a sharp enough drop to change all the assumptions about consumer spending, corporate profits and the outlook for stocks.
"It's changed a lot of thinking about earnings in the second quarter," said Valliere.
Next week will bring economic reports on wholesale and consumer pricing, as well as housing starts and building permits. The Fed's Beige book, normally a lower-profile report on the strength of manufacturing in different regions around the country, will get much closer attention when it is released Wednesday afternoon, Valliere said.
For a schedule of next week's reports, click here.
But earnings reports will also be closely watched, particularly what corporate executives are saying about sales and demand going forward.
Troubled automakers General Motors Corp. (Research) and Ford Motor Co. (Research) are set to report what both have signaled will be disappointing results. GM is due Tuesday, while Ford's out Wednesday.
Thursday morning comes reports from United Parcel Service (Research), the world's leading transportation company, along with Union Pacific (Research), the nation's largest railroad. Both can be bellwethers about the level of freight being moved by businesses.
After IBM's results shook the market, there will be more attention given to chipmakers Texas Instruments (Research) when it reports after the market close Monday, and Intel (Research) on Tuesday afternoon.
The Fed does not meet this month. But it meets in just over two weeks on May 3, and the comments of Fed governors leading up to that meeting will be even more closely watched than normal.
"The Federal Reserve and energy prices really have the fate of the economy in their hands," said Chan.
For more on the Fed and higher rates, click here.
Worried about higher oil and gas prices? Click here.
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