The Federal Reserve’s internal report presents an impressive mass of data to support the Committee’s conclusions. A summary of the highlights follows:

Hiring of temporary workers is up 15 to 20 percent: Temporary employment agencies are reporting a substantial increase in hiring of temporary workers. Companies often hire temporary workers in order to meet a temporary increase in demand for goods and services. However, if the increased demand continues for several months, companies begin hiring full time employees.

New claims for unemployment are below 400,000 for a fourth week in a row: Nationally the economy can produce about 400,000 new jobs per week, under present economic conditions, so this number is considered the current employment "break even point". If the rate of new unemployment claims drops below that number for several weeks, the net number of unemployed workers will decrease in the coming weeks.

Disposable personal income is increasing: Disposable personal income, or money not needed to pay fixed monthly bills, rose 1.5 percent last month, the largest increase since January of last year. Real income, which subtracts out inflation from nominal pay raises, registered a 1.3 percent rise last month, up sharply from a 0.2 percent increase the month before. That could mean increased spending for goods and services. If it does, that will lead to an increased hiring of workers.

Consumer spending is up: Consumer spending rose 0.8 percent last month, faster than the 0.6 percent recorded the month before. Overall real personal spending is up 3.4 percent since the beginning of the year. This is significant because consumer spending usually accounts for two-thirds of our economic activity.

New orders for durable goods is up: Consumer spending for durable goods increased by 2.1 percent last month, up sharply from 1 percent the month before. Durable goods are things like cars and appliances that are expected to last more than three years. They are typically big ticket items that pump a lot of money into the economy.

The demand for personal services is up: Consumer spending for personal services was up by 2.3 percent following a 1.4 percent rise the previous month. This is significant because personal services is the fastest growing sector of the economy.

Consumer optimism has increased: The University of Michigan consumer sentiment index is higher again this month. The index rose to 90.9 this month up from 88.3 last month and 86.0 percent the month before.

Business optimism has increased: The purchasing managers index (PMI) rose unexpectedly to 58.9 percent this month from 55.9 percent last month. The index indicates that manufacturing activity is expanding at a healthy clip and bodes well for the rest of the economy.

The economy is growing at over 3 percent annually: The Commerce Department reports that the economy grew at a 3.1 percent annualized rate in the second quarter. Gross domestic product (GDP) over 3 percent is considered a healthy level for sustainable economic growth. A number below 3 percent is considered anemic and indicates the economy is struggling, while a number significantly above 3 percent indicates the economy is racing and could raise the possibility of shortages and inflation. By contrast, the economy grew at an annual rate of only 1.4 percent during the first quarter of 2003 and the last quarter of 2002.

This is THE REAL TRUTH !