Markets and Economy

This weeks jobless claims are actually important because all signs point to a red hot recovery underway. Many economists look at commodity prices as a guide and boy are they ever hot. National Center for Policy Analysis has a good breakdown.

Therefore, the upswing that we have seen in commodity prices is a strong sign of a turnaround -- but of course, with a lag.

* As prices rise, profitability returns, leading to new investment and the rehiring of laid-off workers.

* As aggregate incomes rise, sales increase further, leading to economic expansion.

Soybeans at $7 is almost unheard of; cattle above eighty cents ditto. The Commodity Research Bureau Index (CRB) is near 250 (212 is considered average). All accross the board we have higher commodity prices. Metal prices have skyrocketed to a 30 percent rate from a 5 percent decline-rate over a year ago. Raw industrials have moved from 0 percent to 21 percent plus. JOBS is the most important statistic of all and this weeks usually "not that important data" will be significant. Check out Kudlows piece which is a rehash of some of his earlier stuff for more. Of course eventually this will be inflationary.