Leading indicators have been strong the last few months, and that's telling us we're going to see very strong acceleration in first-quarter growth.
Capacity constraints are clearly in the forefront and are what keeps the Fed going in the near term.
We are seeing some very strong global growth trends so that should prop up exports.
A late Easter this year, following an early one last year, contributed to weakness in chain store sales in March, and should ensure strength in April.
It's clear that we've seen some pass-through of raw materials costs to producer prices, but retail inflation is still restrained.
We should see continued consumer weakness in October and November, while industry overall does quite well. The soft trajectory going into the fourth quarter has adverse implications.
Core inflation was the good news in the report. That calmed the financial markets.
I think there is significant confusion at the Fed itself.
I wouldn't view this as the start of a weaker trend.
The manufacturing surveys from September confirm that there has been no broad-based deterioration in activity due to the energy price spike in the aftermath of Katrina. This is quite promising for the growth outlook.
