The U.S. economy is doing fine and should continue to do grow.[@@]

James Swanson, chief investment strategist at MFS Investment Management, Boston, gave that un-dismal forecast here at a year-end investment outlook conference.

The economy should do well because corporate debt levels are relatively low, capital expenditures have been high, and public companies have plenty of income they can use to make interest payments, Swanson said.

An influx of new workers entering the job market, an increase in business spending and economic growth in foreign countries all should contribute to continuation of the current expansion, Swanson said.

Another MFS executive, Michael Roberge, the company’s chief fixed-income officer, said U.S. companies’ low debt levels put them in a position to make investments that will improve productivity.

The Federal Reserve Board seems likely to adopt at least 3 more 0.25-percentage-point increases in its overnight lending rate, pushing the benchmark to 4.75%, and that is a sign that the Fed is not seeing recessionary signs, Roberge said.

Although external events such as catastrophic storms and the threat of an avian flu pandemic could have some effect on the economy, Katrina itself affected different market sectors differently, Swanson said.

A historical look at the effects of bombings in the United Kingdom and in Israel show that those countries’ economies returned to their previous course within 8 months to 12 months after the attacks, Swanson said.