Retail spending was much stronger than anticipated. Although some of these gains were due to post-hurricane spending, it appears that consumers are not yet ready to throw in the towel.

Although these data were better than expected, job creation is still weak.

Although the level of sales is still relatively high, the solid growth of the past three years has been arrested, helping the Fed's efforts to slow the pace of economic growth. However, mortgage rates have declined over the last six weeks, so further substantial weakness may not be forthcoming.

Although the fundamentals have deteriorated builders have been cautious, so there is no imbalance of unsold new homes. Therefore, as long as new home sales are maintained near current levels, housing construction can also continue near these levels.

Although the (Fed) will not be pleased with the sharp decline in productivity growth over the past year, they will view it as a cyclical phenomenon rather than a retreat from the productivity-led expansion of the past 5 years.

Although mortgage rates have declined over the past three weeks, mortgage applications volumes have continued to fall. This is partially due to the flat yield curve and partially due to tighter lending standards by financial institutions.

Although inventory rebalancing is well underway, weak sales and elevated inventory-to-sales ratios will keep downward pressure on industrial production and manufacturing employment, ... This situation is unlikely to improve until spending accelerates.

Although housing should slow modestly over the balance of the year, it is unlikely to generate the major weakness typically associated with housing during an economic downturn.

Slower output and employment growth is dampening real income gains, which in turn is slowing spending, ... Although the monthly data continue to be quite volatile during this transition period, the underlying trends are unmistakable -- the economy is slowing from its torrid pace.