The Economy Still Has Room to Accelerate

Recent data suggests the economy is in a point from where activity may accelerate further. This, associated with the fact that there is no sign of a bigger top in the markets, makes any bigger correction a good opportunity to buy (I guess, given the recent run up, that we might see a 40-50 points fall soon).

Here are some economic indicators.

While the growth in Employment has stabilized at a quite normal level

and the deflation scenario is more and more improbable,

(the sticky CPI is a version of the core CPI published by the Atlanta Fed)

the pace of change in Real Durable Goods Orders has turned up from a low level

along with the CPI pace of change

and the ISM New Orders vs Inventories ratio,

all suggesting intensifying activity in the future.

Meanwhile, the pace of change in Real Retail Sales has fallen a bit,

but it can turn upwards from these levels given the overall context. Looking at its behavior during  past periods of expansion, there is nothing to worry about regarding this indicator at the moment.