U.S. Macro Outlook – Still Moving, but Vulnerable

From the Mark Zandi over at Moody's Economy.com:

The economy remains resilient to the ongoing subprime financial shock. Growth is slowing, but the sturdy 166,000 October payroll job gain suggests threats to the expansion are receding. Recession odds have fallen to less than one in three, from a peak above 40% during the height of the financial turmoil.

Recent confidence surveys indicate that businesses are nervous, and hiring less aggressively. Yet aside from those in housing-related sectors they aren’t worried enough to lay off workers. Investment is also sturdy, particularly in commercial structures such as office buildings and hotels. Businesses are loath to cut expansion plans given record profit margins and healthy balance sheets. Earnings growth has slowed sharply, but at least so far, firms are gracefully weathering the financial turmoil.

Great insight, Mark! It's so nice to hear an honest assessment of the current market situation, with a nod to the fact that consumer confidence is the real concern here!

I remain steadfast in my conviction that if everyone would stop crying about the "collapse" of the housing market, the economy will continue to progress in normal market-cycle fashion.