Some of the December strength and January weakness appears to be related to Y2K precautions; the (Federal Open Market Committee) will need a lot more evidence of a slowdown in consumer spending than this to convince them that further tightening is not warranted,

While the auto sector appears to have corrected its inventory overhang, other sectors have not been nearly as successful, particularly high tech, ... As business sales slow, it will be even more difficult to bring inventories into line.

Volumes are still strong enough to generate a few new factory jobs amid robust productivity gains. Moreover, capital spending appears to be on track for another solid contribution to third quarter GDP.

The gentle slowing trend that had been in place for much of 2005 appears to have been halted and partially reversed. However, like many other economic relationships, the one between the index of leading indicators and subsequent economic growth has loosened significantly in recent years.