Data this past week showed the domestic economy is slow, but not slowing. The data are very choppy, unusually so. In fact, the last time the data showed this much of a choppy pattern was way back in the early 1980's, a period with a very low dollar but an economy in recession.

Indeed, the Leading Economic Index was 2 percent higher in September 1982 than it was in November of 1981. Right now, it is no higher than it was in February of this year. Back then housing starts were up. Now, housing is mired in a long and deep slump. But the comparison ends there. Hours worked were down 2 percent back then. Now, they are actually 1 percent higher than in February of this year. Orders for consumer goods were down 2 percent back then, up 2 percent now, and going higher still higher, as we will find out this week. In all, the picture is one of a slow economy but not one grinding to a halt.

Thursday, October 25

8:30am Advance Report on Durable Goods Manufactures' Shipments and Orders (Bureau of the Census)

The ordering rate probably recovered in September, after a significant decline in August. This is likely to be one more data series showing the general choppy pattern to the pace of economic activity.

10:00am Help-Wanted Advertising Index (The Conference Board)

Ad volume through August was more treading water than trending lower, as the labor market slowed. Did these trends continue into September?

BY THE END OF THE WEEK

Housing remains mired in a slump. The stock market decline isn't as long and steep. And the price of barrel of oil remains above $85. Conversely, exports are surging — because markets abroad are more robust and the weak dollar makes them more price competitive. Consumption growth remains steady. Business investment growth is weaker but still positive. All of this adds to perhaps a 3 percent annualized growth in the third quarter and perhaps not much weaker in the fourth quarter. Europe too has problems with the housing market but not as weak as domestically and therefore overall growth isn't as weak. East Asia is doing even better than that. But all that demand not only puts upward pressure on energy prices but material prices in general. That's one reason why central banks abroad debate interest-rate hikes while domestic financial markets remain fixed on the idea that rates could be moved lower.