This week's economic figures show a mixed picture. The inventory figures coupled with the Philadelphia Fed's business outlook survey suggest that perhaps the recession in the manufacturing sector was coming to an end. The business outlook survey showed a smaller rate of decline in activity and the declines in inventories suggested that the correction was well in hand.

In contrast, it appears that the housing market may finally start slowing down after months of seemingly unexplained strength. A slowdown in housing naturally dampens spending on household furnishings, furniture and appliances.

In the financial market place, it appears that everyone is predicting a significant slowdown in consumer spending and a recession to topple over the economy. The terrorist attacks have created a new business environment - one mired in uncertainty. There is no question that certain industries, such as travel and leisure, will be hard hit in the near term. But unless consumers are directly impacted by the tragedy in the form of a job layoff, we may not see the worst fears realized despite this week's plunge in the stock market. Anecdotal evidence shows that life does go on despite horrific events. The first two days following the attacks did see light traffic, or no traffic at all, at retailers. But by the weekend, consumers were back at the malls getting their errands done.

The Fed showed that it was on top of things by lowering the federal funds rate target 50 basis points on Monday morning before the markets even opened. Market players expect rate cuts to be the norm going forward, particularly if recessionary forces take hold.