Over the past few months, we have all been watching closely to see how aggregate activity would unfold in the aftermath of the terrorist attacks. No doubt a great deal of pain has been inflicted on the economy. But, given the magnitude of the shock, the economy has proved more resilient than initially anticipated.
Though several industries have been hit very hard, the worst-case scenarios spun in late September have not materialized. In particular, households' views of the economy have remained relatively stable, all things considered. In fact, in one of the most recent readings, consumer confidence was not much lower than it had been in August.