Economic Indicators

Leading indicator sets are pointing to an acceleration of
economic growth a little down the road.

Dollar order rates have been bouyant in recent months, but
there is upward bias there reflecting sharp increases for
commercial aircraft.

Breadth of new orders for businesses remains in a downtrend,
but the readings are still nicely positive nonetheless.
Although housing has been the media headliner, manufacturing
and service sector order rates were tremendously strong in
late 2003 - early 2004. Understandably, these sectors have
lost zip, but continue to signal moderate growth ahead.

Sensitive materials prices are trending up and unemployment
insurance claims are low and trending down.

One worrisome element remains the real or inflation adjusted
wage. It is not growing. Business is pocketing the income
gains from productivity and not sharing with the labor force.
Continuation of this trend for an extended period will backfire,
leading to lower returns on capital.