(MONEY Magazine) – It's been a little more than six months since the devastation of the Sept. 11 terrorist attacks and the start of America's first war of the new century. This milestone is a good time to take measure of how the markets and the economy have performed--and what, if any, surprises we've seen during this post-catastrophe period.

Recall the shock and uncertainty on Wall Street immediately following the attacks: Most financial experts and journalists steered clear of specific forecasts for the short term, citing the futility of trying to guess the impact on corporate earnings, consumers and the economy. However, a prevailing concern--as noted by Anirvan Banerji of the Economic Cycle Research Institute in the Dallas Morning News several days after the attack--was that "this shock could knock the economy into a longer and deeper recession."

While we avoided a severe recession, fear temporarily infiltrated Wall Street, wiping out $1 trillion in market value in just one week. In late September I interviewed Hugh Johnson, chief investment officer of money management firm First Albany, who said he'd "never seen as much widespread fear among folks, particularly investors. Fear of losing their jobs because they're worried about a recession. Fear about their nest eggs, which are shrinking." In Johnson's words, a lot of investors just "hit that emotional panic button."

Consider where we stand as of this writing.

--The economy is moving at a sluggish pace, but fourth-quarter gross domestic product (GDP) surprised many experts by showing modest but nonetheless positive growth. As Harvey Rosenblum, president of the National Association for Business Economics, said recently, "America's longest expansion in history has been followed by one of the shortest, shallowest recessions on record." Rosenblum continued, "The resilient economy has weathered a series of shocks remarkably well."

--The markets, while down from the beginning of the year, are still up significantly from the September trough. Even with the recent turbulence caused by accounting concerns, the major indexes are following historical patterns for a period after a national or global crisis.

--Inflation remains well under control. According to Goldman Sachs, consumer inflation has declined to 1.1% on a year-over-year basis--matching the lowest rate in more than three decades.

--Productivity rose a stronger than expected 3.5% in the fourth quarter (though this trend may hurt the labor market during recovery).

--Inventories have declined for 11 straight months--an encouraging sign because it shows that businesses are working through unsold stockpiles.

--The housing market continues to boom, fueled by lower mortgage interest rates. According to Merrill Lynch, refinancing activity combined with lower rates on other types of consumer debt will save households up to $70 billion in mortgage payments.

Also of note: Merrill Lynch adds that lower energy prices will save households up to $100 billion. Factor in the tax cuts that kicked in this year and spendable income should increase by around $200 billion.

Naturally, we'd all like to go back in time to economic growth rates of 8% and double-digit market returns. Still, six months after the devastation of Sept. 11, the picture that has emerged appears to be a relatively steady one. Of course, one must view that picture within the context of several significantly negative developments--the most notable being the spectacular collapse of Enron. The biggest bankruptcy in the nation's history has triggered a new age of intensified investor and analyst scrutiny of corporate balance sheets. As a result of that heightened scrutiny, investors have tried to distance themselves from companies with even the appearance of accounting impropriety--a trend that has created turbulence in the markets.

Another stumbling block for the markets and the economy: the continuing weakness in corporate earnings. According to research firm First Call, earnings for the fourth quarter of last year are expected to be down nearly 22%. (First Call expects earnings to fall again this quarter but to grow in the second quarter, reversing a series of declines that began in the first quarter of 2001.)

There have been a number of positive surprises as well, among them, the continued strength in the housing market. Sales of new and existing homes hit all-time records last year. And, in a promising sign for this year, housing starts roared 6% higher in January, to the most robust pace in nearly two years. At the same time, existing-home sales soared 16% to set yet another record high. Moody's Investor Service economist John Puchalla attributes the gains to lower mortgage rates. Puchalla adds that it "generally appears as though the accumulation of wealth--the increase in the amount of jobs during the 1991-2001 expansion--is continuing to enhance household financial flexibility and perhaps has prevented the housing market from undergoing a significant correction."

Overall, from housing to auto and retail sales, consumers have defied the worst-case scenarios whispered about on Wall Street immediately following the Sept. 11 attacks. Goldman Sachs' chief U.S. economist William Dudley says, "The biggest surprise has been the strength of consumer spending, despite large job losses and persistent equity market weakness."

In terms of stocks, Richard McCabe, chief market analyst at Merrill Lynch, says, "What the market has done may be surprising to many investors because back on Sept. 11, when we had this different kind of warfare event, people thought this would lead to all kinds of uncertainty regarding the geopolitical background and the economy, which they interpreted as being a very bad thing for the market."

McCabe notes, however, that the market, having declined for the previous 21 months, made a low in that very oversold condition, then had a sharp snapback rally during the fourth quarter. While stocks have given back some of those gains, there's still been a net rebound since Sept. 11. People may see this comeback as unusual, McCabe adds, "but it is actually what has happened historically." McCabe believes that the market is doing some downside testing now but may be making a bottom. He says, "So all the fears of Sept. 11 are leading to a bottom and may be turning around the bear market of the past two years."

Likewise, economists Puchalla and Dudley also sound cautiously optimistic. Says Puchalla: "Aggressive monetary easing--very rapid expansion of the money supply--should translate into some pickup in business sales, and if you have that in conjunction with the steep drop in inventories that has occurred over the last year, that should lead to some increase in industrial production and output, and also translate into some improvement in corporate earnings." Dudley's forecast? "We expect a moderate recovery, led by the end of inventory liquidation, and we expect monetary policy to remain on hold throughout 2002."

The catchphrases popular among financial experts have run the gamut in the past three years from "explosive" and "unstoppable" to "unclear, but potentially crippling" to, finally, "moderate," "steady" and "cautiously optimistic." In time, terms like "steady" will once again seem unappealing, perhaps even just plain antiquated. But today, a little more than six months after the worst terrorist attack on American soil in history, "steady" seems just about right.

Lou Dobbs is the anchor and managing editor of CNN's Lou Dobbs Moneyline.