More Bush Boom

With jobs and incomes rising, and retail prices falling, December holiday sales were up 8.7 percent from a year ago. It’s the best showing since 1999. Meanwhile industrial production gained 4.4 percent, its best showing since 2000. Factories are humming across the board.

A week ago we learned that 2.2 million new jobs were created in 2004. Multiplying hours worked times wage increases gets us to a 5 percent trend increase for personal income. In truth, it doesn’t get a whole lot better than this.

Meanwhile, the Treasury reports a better than 40% gain in corporate tax collections for the 4th quarter, suggesting that when corporate profits are fully tallied, they will come in stronger than expected. You wouldn’t know it from the sloppy early year stock market, but U.S. business conditions are in excellent shape. That’s why stocks are looking pretty cheap.

From LKMP