Moreover, orders for nondefense capital goods - a key indicator of equipment spending - point to further sizable gains. I view this pickup, along with the improving jobs picture thus far this year, as an indication that business caution about the strength and sustainability of this expansion has waned.
Also of special importance is the improvement in the financial health and profitability of the business sector. Indeed, starting last year, many firms found themselves in the unusual position of being able to finance a pickup in spending entirely out of rapidly rising cash flow, and those that needed to turn to external markets generally found the financing environment to be quite accommodative.