Don't sweat it at all. The level of activity remains robust and the details are quite good.

The pull back in housing remains orderly, at least in the existing market. But the red flags are up. Inventories continue to rise and that is a warning that prices cuts could be coming, and soon.

Core prices continue to rise faster than would be considered comfortable and at the intermediate level they have been surging for the past six months. That is a warning sign.

The manufacturing sector ended the year with some decent momentum that should carry it through the first part of the year.

So far, the cracks in the housing market are not that great, but with inventories skyrocketing, that may not last long.

While we can be somewhat blase about goods [prices], at least for a little while longer, we cannot conclude that retail inflation is anywhere near under control.