Smith Faculty Opinion Article	December 2007
By Dr. John A. Haslem, Professor Emeritus E-MAIL WEB SITE

The 30 Seconds Outlook
December 1, 2007

Economists cannot predict the turning points in the economy. William Sherden, author of The Fortune Sellers.

An economist at the Super Bowl of Indexing bemoaned the likelihood of a recession (note above). Negative news aplenty for the consumer is out in the media, such as falling house values, interest rate resets on sub-prime mortgages and foreclosures. But, this negative consumer news is buoyed by the almost 4 percent increase in real disposable personal income over the past 12 months, and the level of household wealth is close to record relative to income. Bank credit so far is available for good applicants. The number of unsold new homes is high, but continues to decline, as new house construction falls. Exports are increasing. The Fed will likely reduce interest rates this month, and a political house call from the White House appears on the way. Bottom line: economic growth should continue at a slightly reduced rate.

by John A. Haslem

John A. Haslem, Professor Emeritus of Finance, University of Maryland.