In today's New York Times, the answer seems to depend greatly on who one talks to. The entire article is here. Some economists are forecast 3% GDP growth, others are arguing  that a recession may appear in the second half of 2007, others are calling for slower growth, but not a recession. The big issue seems to be how one views the housing slowdown.

But for all the damage done by the deflating housing balloon, it has so far been narrowly circumscribed. Today, virtually every economist agrees that the housing recession is likely to continue weighing on economic growth. But the consensus breaks up over how bad that damage will be. The most important disagreement is over how intensely the housing recession will ricochet through the rest of the economy and how it will affect consumer spending, which accounts for more than 70 percent of the nation’s economic activity.

Here are the opposing viewpoints:

“I find it very hard to believe that what started in housing ends in housing,” said Jan Hatzius, chief United States economist at Goldman Sachs. “That you are not going to get any spillovers from a major recession in a sector that accounts for 6 percent of the economy.”

and

Allen Sinai, president and chief global economist at Decision Economics, observed that past housing-induced recessions were characterized by rising interest rates and tight credit, conditions that do not apply in these days of still cheap, easy money.

The entire article is worth a read, but no definitive answers are offered.