This week's economic data has to be viewed quite cautiously. While economists are frequently accused of "predicting the past" because of their reliance on historical data, this week's data are more appropriate for that accusation than usual. Since the business activities that created this week's data are basically pre-tax cut and pre-Fed (t)easing, whatever the data would show are basically meaningless because the core assumptions behind them have changed so radically.

Early this week, retail sales figures were up higher than expected. Industrial production was +0.4% in June, and production of consumer durable goods was +0.8%. Business-equipment production rose for a second straight month, returning it to levels seen in March of this year. Overall, the economic picture is viewed as getting better. Capacity use was unchanged at 74.3%. The Federal Reserve announced that it was revising the way it calculates utilization, and we will be hanging on every data point when that is finally released. When it is, you'll get the analysis here.

As time permitted on Tuesday, I watched Greenspan's testimony to Congress, and it became quite hard to take, even for me. Maybe he just didn't feel good, but it's clear that the battle lines for the next presidential election are evident even in these hearings-committee members were throwing all kinds of stuff at him. My favorite was the one representative who said that the number of jobs lost in this recession was greater than the Great Depression. Might be, but that's not comparable at all. Our population is three times larger, our workforce is about four times larger (especially with more women and minorities in the workforce as compared to 1930) and our GDP is more than 12 times larger in real terms. So having 12 times the number of people unemployed would be equivalent. What we're going through now is quite minor, relatively speaking.