The level of claims remains remarkably lean. The labor market has improved significantly in early 2006. Payroll growth has likely entered a period of overdrive.

The economy will likely continue to prove surprisingly resilient to rising oil prices.

In general, the economy is proving to be resilient to energy and gas price pressure. It's on a growth path. Even though oil prices are higher, the fundamentals of the economy are strong. Therefore, we see consumers' savings rate falling and spending up.

The labor market remains solid and economic growth will remain firm into the new year.

The net effect on the economy is always positive. We have more consumers of energy than producers and the result is that the sector that benefits from low inflation and low interest rates comes out ahead.

Not only are these numbers small compared to the economy, they don't reflect actual errors in reporting the sales of actual goods and services, ... WorldCom, for example, wasn't overstating the amount of phone service it provided.

Even with the weakness in the headline number, the rest of the story looks good. June, July, August have all shown strength in retail sales outside of autos.

Consumers are always concerned about the economy but the key is whether they are predisposed to increasing caution when it comes to spending. I think today's report demonstrates that the hurricanes had an ambiguous affect on spending.

It's the impact from Katrina, which in the first few weeks will be at a maximum, and it does increase our confidence that we will see a hit to the other sentiment indexes in September.

It's a slow week for releases, ... I think there's almost no chance the productivity revision or the wholesale inflation numbers will have much effect on the Fed's March policy decision.