The economy is strong enough to keep corporate earnings growing, but not so strong that inflation will be a major factor.

The rally is justified. The economy continues to be strong enough to keep corporate earnings growth strong, but not too strong that we'll have any sort of intense inflation worries.

The implication is that the economy is strengthening, but that inflation is not substantial, and the Fed will be able to handle it if it should become so.

We hope TNF, together with other stakeholders in the economy, will come up with ways of disciplining inflation. No one wants to see this figure continue to rise at such a rate any more.

This is great news on the inflation front. It will be very difficult for the economy to generate any sustained rise in core inflation with unit labor costs showing such a high degree of restraint.

The economy is probably more hot than cold at this point. The inflation measure will be the one to watch because that will be one of the key determinants of whether the Fed hits the brakes or steps on the accelerator again.