A late Easter this year, following an early one last year, contributed to weakness in chain store sales in March, and should ensure strength in April.

The manufacturing surveys from September confirm that there has been no broad-based deterioration in activity due to the energy price spike in the aftermath of Katrina. This is quite promising for the growth outlook.

Core inflation was the good news in the report. That calmed the financial markets.

We should see continued consumer weakness in October and November, while industry overall does quite well. The soft trajectory going into the fourth quarter has adverse implications.

I wouldn't view this as the start of a weaker trend.

Capacity constraints are clearly in the forefront and are what keeps the Fed going in the near term.