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**br`lorance** · 09-03-2007, 10:31 PM

The US economy is certainly not heading for a Depression. But it's not in danger of overheating either. Despite the threat of a stagnate housing market, inflationary concerns (even though these concerns are wavering), and corresponding threat in rising interest rates (which would further slow the housing market by increasing defaults on mortgage loans), consumer confidence has not been challenged. In fact, consumers have been and seemingly will continue to be the driving force behind this economy.
BBC NEWS | Business | US economic outlook 'improving'

If consumers can "soften the landing" (as the article states) of a stumbling housing market and keep us afloat, hopefully businesses will have a stronger earnings outlook and revive capital spending. Actually, the beginnings of this may be on the way:

"Chief financial officers are increasingly optimistic about the U.S. economy. The latest Duke University/CFO Business Outlook Survey reveals that 35 percent of finance chiefs are more optimistic than they were last quarter, and for the first time in more than a year, optimists outnumbered pessimists."Business Outlook Survey - Business Outlook Survey - CFO.com

But the article does say that such optimism is lower than it had been several years ago, so we mustn't get too excited. The US economy is not currently strong, nor is it weak. It's just here......enjoying the benefit of low interest rates with little threat of rising inflation, cheap consumer goods coming from China, a low individual savings rate without damaging consumer confidence, and high trade deficits without a significant threat of falling foreign direct investment. If any of these things change, the US economy doesn't look so hot.

09-03-2007, 10:31 PM	#3
br`lorance Join Date Nov 2005 Posts 442 Senior Member	The US economy is certainly not heading for a Depression. But it's not in danger of overheating either. Despite the threat of a stagnate housing market, inflationary concerns (even though these concerns are wavering), and corresponding threat in rising interest rates (which would further slow the housing market by increasing defaults on mortgage loans), consumer confidence has not been challenged. In fact, consumers have been and seemingly will continue to be the driving force behind this economy. BBC NEWS \| Business \| US economic outlook 'improving' If consumers can "soften the landing" (as the article states) of a stumbling housing market and keep us afloat, hopefully businesses will have a stronger earnings outlook and revive capital spending. Actually, the beginnings of this may be on the way: "Chief financial officers are increasingly optimistic about the U.S. economy. The latest Duke University/CFO Business Outlook Survey reveals that 35 percent of finance chiefs are more optimistic than they were last quarter, and for the first time in more than a year, optimists outnumbered pessimists."Business Outlook Survey - Business Outlook Survey - CFO.com But the article does say that such optimism is lower than it had been several years ago, so we mustn't get too excited. The US economy is not currently strong, nor is it weak. It's just here......enjoying the benefit of low interest rates with little threat of rising inflation, cheap consumer goods coming from China, a low individual savings rate without damaging consumer confidence, and high trade deficits without a significant threat of falling foreign direct investment. If any of these things change, the US economy doesn't look so hot.
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