NEW YORK — Healthy economic growth is welcomed everywhere, from Main Street to the White House. Just not on Wall Street.

That's because some investors were counting on the Federal Reserve to start cutting interest rates this year to offset economic weakness. Shareholders like rate cuts because they lower corporate borrowing costs, which then boosts earnings.

But the current "growth scare" — as some market-watchers are calling it — is turning that idea on its head, and forcing many in the market to realize that the Fed might not act so fast.

This wasn't what most economists were forecasting for the economy in 2007. The consensus was that the Fed would eventually have to start cutting rates to keep the economy from stalling. Since August, the Fed has held the overnight bank loan rate steady at 5.25 percent after raising it 17 times in quarter-point increases that began in June 2004.

There were plenty of reasons why a rate-cut scenario seemed likely. Consumer spending appeared to be slowing; sales were lackluster during the holiday season. The housing market had been battered by declining sales and reduced building activity.

But recent data paint a different picture. It seems things aren't so bad after all.

One closely watched measure, the Institute for Supply Management's manufacturing index, showed a bigger-than-expected gain for December. That countered November's contraction, the first since April 2003.

Job creation also accelerated at the end of last year, which suggested that the economy might be in far better health than most economists had been forecasting.

Employers added 167,000 new jobs to their payrolls in December — topping the six-month moving average of 161,000. The unemployment rate held steady at 4.5 percent and the number of newly laid off workers seeking unemployment benefits is at six-month lows, according to the Labor Department.

At the same time, wages are growing — good news for workers, but maybe not for businesses or for the Fed's inflation watchers. Compensation rose 4.2 percent since December 2005, the fastest income growth in the current expansion cycle, according to Wells Fargo.

A steep drop in crude oil futures prices, which have fallen about $25 a barrel since July to around $51 is also helping boost the economy, as is the warmer-than-usual weather in many parts of the country.

But Wall Street isn't equating good growth with good news. Wells Fargo senior economist Scott Anderson notes that it has led investors to "fret about the Fed's next counter move."

Three Fed officials added to those fears last week when they suggested the central bank is far from lowering rates, with inflationary pressures still a concern.

The fed funds futures market now sees no chance of an interest rate cut through the first quarter, and only about a 25 percent chance of a cut at the Fed's June meeting. That's about half of expectations just weeks ago.

Merrill Lynch chief North American economist David Rosenberg had generally been bearish on the economic outlook. But recent data led him to boost his forecast for economic growth from a 1.8 percent annual rate to a 2.7 percent pace for the first quarter. He called it a "growth scare."