Leading indicators have been strong the last few months, and that's telling us we're going to see very strong acceleration in first-quarter growth.

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.