Now, currently, we don't see the slowing in housing markets spilling over into a more prolonged period of weakness in the U.S. economy overall. On balance, the 95 percent of the economy outside of housing remains on good footing. Employment has been increasing near its long run sustainable path. Productivity trends remain solid. Recent declines in oil prices should give household budgets a boost. Economic growth in other countries should increase demand for our exports. And current financial conditions are not very restrictive by historical norms.
So, my baseline forecast is that GDP growth will pick up from the weak third quarter and average somewhat below its potential growth rate over the next year or so. Of course, that's an average. And I expect to see some volatility in those numbers.
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Our estimate is for '07..., as I mentioned, growth would be slightly below potential, but it should be coming back to potential as we exit '07 and go into '08.