NEW YORK (Bloomberg) ? The Standard & Poor?s 500 Index is at a five-year high. Industrial commodity prices are soaring. Hiring in the US is on a roll. Corporate profits are commanding a record share of national income. Europe and Japan are emitting flickering signs of growth, taking some of the burden off the US and China.

So, as that old sage Chauncey Gardener might say, in the spring it will grow.

What about summer, autumn and winter? It?s subsequent seasons we need to be concerned about. With forecasting, as with money management, past performance is no guarantee of future results. And yes, it always feels good at the top ? in the stock market and in the business cycle.

With that in mind, and on the heels of a solid employment report for March, herewith are a couple of worrisome gaps, or relationships, in the US economy that bear watching.

Let?s start with the gap in the housing market between demand (sales) and production (starts). In case it?s not intuitive, home sales lead housing starts. Home builders, like other producers, take their cue from demand for new houses.

If demand slows and production doesn?t, inventories pile up. Unless builders want to run their business into the ground, they build fewer houses.

Something?s Gotta Give

The difference between new home sales and single-family starts has reached extremes seen only a handful of times, according to Joe Carson, director of global economic research at Alliance Bernstein. In all three previous instances ? 1972, 1978 and 1984 ? starts took a tumble.

Today?s economy is nothing like the economy of the 1970s, with its high inflation and over-regulation. Subsequent recessions battered the entire economy, not just the housing market.

Still, single-family starts, near an all-time high, are vulnerable to a fall in light of softer sales.

Housing guru Michael Carliner at the National Association of Home Builders in Washington says that starts ?have to be high because of the backlog of unfilled orders?.

What?s more, starts include homes ?not being built for sale: those that are custom built on customer land?, he says.

Currently custom-built houses account for about 20 percent of the market compared with 40 percent in the 1990s, which means today?s ratio of starts to sales would be even more out of whack since more of the starts are homes for sale.

Revival Meeting

The growth rate in the non-defence capital goods sector has overpowered ?the consumer goods sector since early 2004, consistent with the peak in consumer income gains,? Fosler writes in her monthly letter, ?Straight Talk?.

?The widening difference in relative performance between the two sectors has been sustained longer than at any time since the gap between 1987 and 1989.?

While investment spending has the tail wind of exceptionally strong profits and cash flow at its back, Fosler doesn?t think the ?relatively smaller investment sector can make up for the weakening conditions in the relatively larger consumer sector?.

Could consumer goods resume its leadership role? Not likely, she says, with the fundamentals negative. The growth rate of wage and salary income has been declining since the December 2004 peak.

?The consumer is looking at a considerable drag, amplified by housing,? she says. The strength in the job market is offsetting some of it, but unless hiring translates into wage and salary growth, consumer demand won?t alter the fundamentals, she says.

Sentiment Inequality

The third gap is in consumer confidence: the difference in consumers? view of their current situation and their expectations about the future; and the gap in attitudes of upper- and lower- income households.

The expectations component of the Conference Board?s consumer confidence index has been trending down even as the present situation index has steadily improved for 2 years, ?supported by a relatively good job market,? Fosler says.

Last Friday, the Labor Department reported a 211,000 increase in employment last month and a 0.1 percent point decline in the unemployment rate to 4.7 percent.

Another monthly confidence measure ? this one compiled by the University of Michigan ? showed a gaping hole between rich and the poor.

?The gap in how low- and high-income households view their current finances and future prospects is the widest in two decades,? says Richard Curtin, director of the University of Michigan Surveys of Consumers. ?It?s an unusual circumstance.?

All three gaps ? in housing, in the goods market and confidence ? are unusual, in fact. The US economy was in good shape when we sprang forward ? set the clocks ahead one hour ? on April 2. It remains to be seen whether it will fall back by October.

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