Both consumer spending and housing starts jumped in July and held steady in August. Business outlays for capital equipment also appear to be on an upward trend, continuing to rebound from their weakness of the past several years. And with financial conditions still accommodative, I expect that economic activity will continue to expand at a solid pace for the remainder of the year.
At the same time, it appears that inflation and inflation expectations have eased. The core consumer price index, which excludes food and energy, edged up only 0.1 percent in each of the past three months through August.