Every few months the Journal interviews sixty economists to gauge economic expectations going forward. What makes this report telling is that it is after the subprime mortgage market collapse of the last few weeks. Here are the average expectations from the group:

Nationally, home prices will fall less than 1% in 2007;

GDP will increase 2.3% in 2007;

Inflation will be between 2-3% in 2007;

Interest rates will be slightly lower by year end; and

Inflation will rise slightly from current levels.

The woes of the subprime mortgage market are the latest chapter in deterioration of the housing market. Concerns about the sector and the ripple effects on the economy have been blamed for gyrations in the stock market the past week, including a 2% drop in the Dow Jones Industrial Average Tuesday. But just 22% said difficulties in the subprime market have caused them to downgrade their economic forecasts and, by a 4-to-1 margin, they agreed with the statement that "the worst of the housing bust is behind us."

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