For investors who focus their investment strategies with regard to the broader economic backdrop, the next few weeks are likely to get a lot of attention. A slew of key data points may help investors better assess whether recent signs of slowdown are just a passing phase, or a harbinger of a deepening trough for the world’s largest economy.

Approaching Stall Speed
Each week, economists at Morgan Stanley (NYSE: MS) incorporate fresh data points to update their models for GDP growth. At the end of January, these economists predicted the U.S. economy would grow around 2.3% in the first quarter. That figure is roughly in-line with the fourth quarter of 2013’s GDP growth rate (which was recently revised down from 3.2%).#-ad_banner-#

But over the past month, Morgan Stanley’s forecasts have been steadily trimmed. Thanks to weak construction spending, slow retail sales and a low level of housing starts, they now think the economy is on track to grow just 0.7% in the first quarter. To put that in context, the U.S. economy has grown less than 1% (on an annualized pace) only once in the past 11 quarters. In the third quarter of 2011, the economy almost slid back into recession, before regaining its footing in subsequent quarters.

Frozen Out
To be sure, some of the slowdown is attributable to frigid temps in the Eastern U.S. Who wants to go shopping when the mercury falls to zero? That’s why U.S. Federal Reserve Chairman Janet Yellen and others believe an eventual return to spring-like temperatures will enable the economy to rebound.

Yet you shouldn’t under-estimate the lasting damage that this cold spell may have. For example, many consumers are experiencing an alarming spike in heating costs, which is draining their savings accounts, and therefore taking a bite out of future domestic consumption. “More costly energy consumption has drained an estimated $20 billion from consumers’ discretionary budgets in Q1,” predict economists at Citigroup (NYSE: C).

Slowing employment trends are also sapping confidence. As a result, economic weakness, especially in the form of consumer spending, which still accounts for the majority of domestic economic activity, may slump into the second quarter as well.

To be sure, the stock market seems to be ignoring the economy at the moment. Though the S&P slid more than 2% on the first day of trading in February (to 1,742), it managed to rebound an impressive 6.7% for the rest of the month.

Are investors buying stocks because the economy is weak? After all, an extended period of weakness would lead to Fed to keep its foot on the gas with the current stimulus program. Yet it bears repeating that at this extended phase of the bull market, a backdrop of greater economic growth and less Fed stimulus is greatly preferable to weaker economic growth and more Fed stimulus. Some Fed governors believe that stimulus should end soon to avoid any asset bubbles.

Citigroup’s economists have taken note of the disconnect between the economy and the market in February: “There are likely to be some tests for confidence at least in February data due out over the next four to six weeks,” they wrote in a Feb. 21 note to clients.

Here are three crucial data points you need to track in coming weeks.

1. Non-Farm Payrolls (March 7, 8:30 a.m. EST)

Consensus forecasts suggest that the U.S. economy added 113,000 jobs in February. Look for the media to quickly cite the weather as a negative — and perhaps temporary — factor. Trouble is, the job market showed signs of slowing back in December, before the deep freeze took root. Though it’s unwise to put too much emphasis on any specific monthly report, the three-month average already slipped to its lowest level in 18 months in January. And if the consensus figure proves correct, the three-month moving average will have fallen to less than half the rate seen back in November, 2013.

2. National Fed. Independent Businesses (NFIB) Optimism Index  (March 11, 7:30 a.m. EST)

This key confidence gauge has been rising for the past few months, to 94.1 in January, although as the NFIB noted in last month’s report, the rate of growth has been slowing. Still, the figure is up nicely from the 88.9 reading a year ago. The NFIB’s economists warn that the 2013 rebound may not have legs: “A huge share of the growth was in inventory building, nice while it is happening, but usually followed by sub-normal production later as excess stocks are worked off. That will depress activity in the first half of 2014.” Even if the next few readings remain in the 90s, that’s still little reason for cheer. The NFIB index has been below 100 for six straight years, which is the longest period of sustained weakness in three decades.

3. Federal Open Market Committee (FOMC) (March 18-19)

As noted earlier, the market’s impressive gains in February may have arisen from expectations that the Fed will alter course at this upcoming meeting, letting the stimulus program stay at current levels for a while to come. But the Fed has been trying to signal to markets that it won’t alter course — at least not yet. Two weeks prior to this two-day meeting, the Fed will be digesting the latest reading from the Beige Book, which provides a snapshot of economic activity among the various Fed regional districts. Again, even if the Beige Book reading shows weakness that doesn’t mean the Fed will respond. Instead, they will likely push off any potential change in policy until the following meeting, slated for early May. Will investors be disappointed and lock in profits if the Fed fails to move in mid-March? Time will tell.

Risks to Consider: As an upside risk, sluggish demand in winter could unleash a pent-up wave of spending in the spring. The key is for the economy to avoid a more serious downdraft before then, which would sap consumer and corporate confidence.

Action to Take –> It’s too soon to sound the alarm bells for the U.S. economy. Economists at Citigroup, for example, predict that we’ll get past this growth scare, and the economy will rebound to a 3.5% growth rate in the second quarter. They predict an especially impressive rebound for housing starts and housing sales. “Residential investment will gain momentum with double-digit gains in the back half of the year.”

Also, if the economy rebounds in the second quarter, retail sales should get a strong lift as consumers become less cautious. Automakers would be among the stocks investors should be focusing on, if they believe that consumer spending is likely to build as we head toward summer.