How Sure Is a Soft Landing?

Over the past 18 months or so, the U.S. has experienced the headiness of a boom followed by the sluggishness of an investment bust. Now, as the country heads into the second half of 2001, the growing consensus among many economic and market forecasters is a return to normalcy after a second-quarter slowdown. That means moderate growth, in both the economy and the stock market.

What does moderate mean? According to BusinessWeek's survey of leading economic forecasters, growth over the next four quarters should average just under 3%. That's below the 3.5% growth rate that many economists now believe the U.S. can sustain over the long run. Nevertheless, it would still be quite a decent expansion. Similarly, there's a sense among market analysts that the stock market, now down 8% since the end of 2000, will stage a moderate recovery in the second half of the year.