Whether the credit should go to the stimulative effects of cheap credit, a weakening dollar, a round of tax cuts or the tenacity of the American consumer, the economy is chugging toward the last mile of 2003 amid a growing spirit of optimism.

Underpinning the upbeat mood is the real estate market, where prices are soaring and builders continue to hammer together new homes at a near-record rate.

Skeptics, however, note a steep fall-off in mortgage applications, which has them wondering whether Americans’ infatuation with new-home construction is nearing an end. Adding to concerns: Stocks of homebuilders have taken a rapid tumble.

That brings us to Tuesday’s report on November housing starts. Chicago economist Maria Forres, of investment firm Griffin, Kubik, Stephens & Thompson, is looking for it to show a drop of more than 4 percent, to an annual rate of 1.87 million units from 1.96 million a month earlier.

However, while the housing market will cool slightly, Forres said there are few signs there will be any dramatic dropoff for home construction. This year’s housing starts are expected to finish at the highest level since the mid-1980s.

“The economy will create 3 million new jobs in 2004, resulting in income growth, while demographic trends are creating plenty of demand for new homes,” Forres said.

An unexpected drop of 0.3 percent in Friday’s report of November wholesale inflation has economists looking ahead to Tuesday’s report on the month’s consumer price index, anticipating a rise of no more than 0.1 percent.

However, economist Ian Shepherdson says that doesn’t mean all worries about inflation can be put aside.

He said the headline number on wholesale inflation was held back by a 4.8 percent drop in gasoline prices, as well as a surprise decline in the cost of food.

At the same time, Shepherdson says core prices for crude materials rose 4.3 percent last month and are up more than 17 percent in the last year.

“Core intermediate prices were up 1.8 percent year-over-year and finished goods only 0.5 percent,” he said. “But the pressure is clear.”

If, indeed, inflationary stresses reappear in the next few months, it could derail widespread expectations that the Federal Reserve, which has pushed interest rates to a 45-year low, can let them remain on hold until after November’s elections.

For a while, there was talk that the economy’s revival might be a flash in the pan. Such concerns are likely to diminish further with Thursday’s report on the November leading economic indicators.

Analysts are expecting a rise of 0.3 percent, on top of the 0.4 percent gain in October.

For the first time in 18 months, the stock market has seen the Dow Jones industrial average hovering above 10,000. That has some analysts wondering whether investors are about to grow nervous, resulting in a yearend selloff on Wall Street.

Chicago investment manager Marshall Front of Front Barnett Associates says there is little danger of any sizable setback. He said, “The economy is improving more rapidly than anyone thought, the Fed is going to remain on hold for quite a while, and corporate profits are growing like gangbusters.”

One cloud on the horizon, he said, is that politicians in Washington have grown bolder about deficit financing.