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The stock market's calmer, but the jury's still out on what the mortgage mayhem means for the economy. So far, however, there's scant sign of trouble in the numbers.

Thursday's report on initial jobless claims, for instance, offered more of the same of late, which is to say that a middling performance remains the status quo. For the week through August 18, new filings for unemployment insurance actually slipped by 2,000 to 322,000, which is virtually unchanged from a year ago. There may be great drama unfolding in the capital markets, but yawns still dominate analysis of employment's leading indicators.

Of course, this may be the calm before the storm for the economy. Morgan Stanley's chief U.S. economist, Richard Berner, told The Wall Street Journal in a story published on Friday, that economic trouble is brewing, even if it's not yet obvious. He predicted that "the housing downturn is going to be more prolonged and deeper than people might have imagined."

Nigel Gault of Global Insight echoed the sentiment. On Thursday, he warned in a research note that "the economic outlook has dimmed," The New York Times reported. The firm predicted that GDP for the third quarter will rise by 1.9%, down from Global Insight's previous forecast of 2.1%.

Adding to the gloom was Countrywide Financial's (CFC)) darker assessment that a recession is approaching. “This is one of the greatest panics I’ve seen in 55 years in financial services.” The forecast came from Angelo Mozilo, chief executive of Countrywide, the biggest mortgage lender in the U.S., who opined on CNBC via the New York Times. "I just don’t see a light here at the moment. I can’t believe when you’re having this level of delinquencies—equity is gone, the tide has gone out — that this doesn’t have material effect on the psyche of the American people and eventually on their wallets." Of course, when you're look at the world from the ground zero of mortgage implosion, as Countrywide does, sunny dispositions are hard to come by regardless of climate.

In contrast, the Congressional Budget Office offered a more upbeat take on the economy for the near term. CBO advised that the fallout from the mortgage crisis so far had been "quite muted," according to Reuters. CBO Director Peter Orszag said market turbulence may continue, but the economy still looked robust, he said. Of course, he repeated his concern that the nation's budget deficit looks unsustainable in the long run, but we'll leave that one for another day.

Meanwhile, statistical support for Orszag's optimism for the near term came in Friday morning's durable goods report for July. There's no other way to describe it other than to say that new orders for durable manufactured products soared last month, popping 5.9% in July vs. June. In fact, last month's increase was the fifth gain in the last six months and the pace was the strongest since the current series was first calculated in 1992, the U.S. Census Bureau advised. What's more, there was no obvious fine print undermining the surge. For example, excluding transportation, new orders increased 3.7 percent; excluding defense, new orders increased 4.9 percent.

But make no mistake: there's plenty of debate about what comes next. Last month's durable goods orders only capture the front end of mortgage-related fallout. It will take months to confirm (or deny) the message embedded in the durable goods report. But at least we know that the economy was bubbling as it headed into the unrest of August. At this point, that's about all we can say.

Source: Is the Economy Really Okay?