Do you smell that?

It's starting to smell a lot like last year.

Then, the economy and stock market boomed for the first few months of the year only to peter out in summer. Same deal this year -- so far at least. The first few months brought the strongest job gains in years, a booming stock market, and hope that things were really turning the corner.

Now we're back to questions. Worries. Whispers. Jobs numbers are miserable. Gross domestic product is slowing. Stocks are down seven of the last eight weeks. Don't even ask about housing.

Time to worry? Who knows. But here's a bit of solace: Of the past 10 recessions, at least six have seen a major slowdown in the middle of what became an otherwise solid recovery. Nothing goes straight up. If the current slowdown is something more sinister than a normal quiver, it isn't -- and can't -- be known right now. Economies have too many moving parts to make accurate forecasts.

Still, it's helpful to know the broad points. Right now, two things in particular are on people's minds: jobs and housing. Here are a few things to ponder when considering where each is headed for the rest of the year.

Jobs
There are two things you need to know about the job market.

The first is that creating jobs doesn't necessarily bring down the unemployment rate. Every month, roughly 150,000 new workers enter the job market through population growth and immigration. We need to add enough jobs to cover these new entrants just to keep the unemployment rate from rising. The monthly jobs gain over the past six months has averaged 155,000 -- just barely enough to break even.

Similarly, the employment population ratio -- the number of able-bodied working-age people who are employed -- is now just 58%, down from 63% a few years ago and an average of 62% over the past 20 years. A lot of people who could be working aren't, either because they've given up looking for a job or have gone back to school to wait out the recession (I can't tell you how many people I know are in the latter group). Once the economy perks up, many of these folks will re-enter the job market, effectively adding more "new" workers to the 150,000-per-month already entering from population growth.

Bottom line: Job growth could surge without putting a dent in the unemployment rate. Last week, Federal Reserve Chairman Ben Bernanke said, "We're still years away from full employment." He's almost certainly right.

The other thing to know about the job market is how misleading the nationwide average is.

The job market as it pertains to you depends on three questions: How old are you? How educated are you? Where do you live?

Unemployment rates by state range from 4.8% in South Dakota to 12.1% in Nevada. Break it up by other factors and the range is even more dramatic. When joblessness peaked in late 2009, unemployment rates ranged from 28% for young, uneducated males, to 4.1% for educated females over age 45. Among all ages and both sexes, unemployment rates in 2010 ranged from 1.9% for those with doctoral degrees to nearly 15% for those without a high school diploma. The nationwide average unemployment rate is largely irrelevant when feeling out your own prospects. You have to look at your individual circumstances and go from there.

Housing
The health of all assets rests on valuation. Housing is no different.

The good news is that housing valuations nationwide now look decent. Home prices as a percentage of average income, for example, are now below historic averages.

But like the jobs market, nationwide averages can be misleading. Housing's prospects rely overwhelmingly on one question: Where do you live?

Here, the news is more mixed. The rough historic rule of thumb is that renting is preferable to owning when the price-to-rent ratio (home price/12 months rent) exceeds 15, and owning becomes superior when it falls below 15. Today, plenty of metropolitan areas are at or below 15 after surging far beyond during the housing bubble. Sacramento, Calif., Chicago, Los Angeles, Tampa, Fla., Orlando, Fla., and Phoenix, to name a few, all have price-to-rent ratios at or below 15. On the other hand, San Francisco, Seattle, Denver, and Washington, D.C., to name a few, are still well above 15, and well above their respective long-term averages. (For a more detailed view, see here. )

Even where prices look reasonable, a question lingers whether they will get more reasonable. Prices don't tend to simply fall back to averages after bubbles burst. They drop below average and stay there until emotional scars heal. That can last years. Exacerbating the pain, there's still a tremendous amount of unsold homes either on, or about to become on, the market, putting a downward weight on prices. That should last at least another year or two as inventory is cleared out.

See where this is going? Many housing economists don't expect the nationwide market to return to normal until late 2012 at the earliest. My bet is with them. And when housing does recover, keep in mind that normal housing appreciation is 2%-3% annually -- not 20%, as some came to expect during the bubble.                     

Where do you think we're headed next? Let us know in the comment section below.

Fool contributor Morgan Housel doesn't own shares of any of the companies mentioned in this article. 

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