Continuing progress on the war front and further declines in oil prices lifted stocks in the holiday-shortened session Friday, and that buying momentum could continue in the early part of next week.

But with the economy likely in a recession and recent economic data pointing tentatively to improving fortunes, investors will be paying close attention to coming economic reports. Wall Street is betting on an economic turnaround sometime in the spring.

The National Bureau of Economic Research, considered an authority on recessions, is expected to declare in the next few days that the U.S. economy is in one. Under the common definition -- two straight quarters of

gross domestic product contraction -- the U.S. hasn't yet slipped into recession. The NBER bases its decisions on monthly readings of employment, industrial production, real income and wholesale and retail trade, rather than quarterly GDP, which likely would lead the group to declare a recession.

On Friday, updated figures for third-quarter GDP will be released. The consensus estimates call for GDP to shrink 0.7%, rather than the previously reported 0.4% decline. Experts also believe GDP will fall in the fourth quarter.

Meanwhile, consumer spending remains high on Wall Street's watch list. Next week, investors and economists will have an ear to the ground for any anecdotal information about how

retailers fared on the biggest shopping day of the year, also known as "Black Friday," the day after Thanksgiving. Analysts aren't overly optimistic.

The Conference Board's

consumer confidence index for November, scheduled for release Tuesday, is also a key report. The consensus forecast calls for an increase to 85.8 from 85.5 in October.

There are a few good reasons to be sanguine about the consumer. Weekly

jobless claims have fallen for four-straight weeks, putting them at their lowest level since Sept. 15 and suggesting companies have been cutting workers at a slower pace. "Four weeks is not conclusive, but it's intriguing nonetheless," said Mitchell Held, an economist at Salomon Smith Barney.

If recent declines in jobless claims persist, a recovery could begin in the first quarter, Bruce Steinberg, chief economist at Merrill Lynch, wrote in a recent research report. Still, he thinks a second-quarter recovery is more likely.

The recent October retail sales report also showed surprising strength, even outside of the booming auto sector. But Morgan Stanley chief U.S. economist Richard Berner noted in a research report that it may represent a "temporary reprieve after September's shock-driven plunge."

After all, October's retail sales were lower than August's numbers, excluding vehicles, building materials and gasoline sales, as well as in key discretionary store categories. "Most important, the fundamentals of declining wage and salary income -- now probably into their fourth month -- seem likely to pressure consumers for the next several months," he wrote in the report.


durable goods orders, which are due Thursday, will shed some light on demand in the manufacturing sector. New orders for big ticket goods, such as washing machines, dropped for a fifth-straight month in September, falling 8.5% to $165.4 billion.

Investors also will have to consider data on new and existing home sales, the Chicago

purchasing managers' index and the


Beige Book.

In short, the skeptics will have plenty of opportunities next week to argue that the worst isn't over, but there's no reason to believe that the optimists will listen. Certainly, not for long anyway.