Some of our favorite economists are those at Morgan Stanley. Today they released the following tidbits:

…solid round of key early economic data for September – a decent gain in employment, moderating ISM surveys but to levels still comfortably in growth territory, and steady motor vehicle sales – and huge upward revisions to job growth in August and July suggested a slowing but far from collapsing economy…our view that the Fed will likely be on hold at the upcoming FOMC meeting after the front-loaded 50bp cut in September…Canadian dollar moved to new highs against the US dollar Friday…We continue to see that robust gain in consumption leading a solid 2.7% rise in 3Q GDP..we still expect to see a meaningful slowdown in 4Q growth towards +1.5% as the summer credit squeeze and a reintensified housing downturn ripple through the economy…

In other words, the economy is slowing, housing is still a drag and may well get worse, it doesn't seem to be carrying over enough for a recession. The Fed action in September seems to have been enough to stabilize the financial markets.