With last week's bank holiday, the flow of economic indicators was at a low ebb. Initially, unemployment claims looked encouraging, as did the more obscure job openings report from the Labor Department. FedEx FDX and UPS UPS both offered favorable comments about the upcoming holiday season, providing one of the first confirmations of improving conditions in the battered transportation sector. Small business optimism managed one of its best monthly improvements during October, but remains mired at depressed levels.   More 

For the past few weeks, I have been talking about the need for improving consumer spending trends. Last week, weekly chain store sales compiled by the International Council of Shopping Centers notched its sixth straight week of sequential improvement. In addition, retail same-store sales trends are coming in above expectations (with the exception of teen retailers).

Retailers are now up against some very depressed comparables from a year ago, but it was still nice to the see a positive sign on the year-over-year data for the first time in months. Also of note, two high-end retailers, Saks SKS and Nordstrom JWN, managed to finally show positive comparisons, joining the ranks of discount retailers such as T.J. Maxx TJX, and Ross Stores ROST, which have been showing better comparisons for some time.   More 

Here's a quick recap of some notable data that has come out recently. None of it jeopardizes my forecast of 3% to 4% GDP growth in the fourth quarter. The Case-Shiller Home price indexes registered another month of improvement, durable goods orders registered a healthy 1% increase, and the University of Michigan consumer sentiment index declined considerably less than the initial midmonth estimate.

The Michigan Survey came in at a respectable 70.6 for the final October reading (the midmonth, preliminary estimate was in the mid-60s--yikes!), but still down from 73.5 the prior month. Confidence numbers in the low 70s are consistent with 3% year-over-year growth in consumer expenditures that we haven't seen, at least not yet.   More 

The GDP's third-quarter jump of 3.5%  isn't a fluke. I'm expecting this growth spurt to extend into the fourth quarter in the same 3% to 4% range, driven by continued increases in auto production, inventory restocking, stimulus spending, and higher exports. The naysayers' chorus has tempered its tune somewhat, but the recovery's chief skeptics aren't ready to throw in the towel just yet. Their new mantra is that the economy's seemingly effervescent third-quarter robustness is nothing more than a fleeting mirage, a shallow side-effect of government-induced smoke-and-mirrors therapy such as the Cash for Clunkers program. When those programs end, they preach, we will surely fall back into the abyss. I say not.   More