The GDP report issued last Friday was quite good, with the measure up +4.8%. I regularly remind people that part of the uptick in GDP was probably spending that was deferred because of the hurricanes or hurricane-inspired cautiousness. If you take the fourth quarter's +1.7% and this first quarter report of +4.8%, you get about +3.25% average growth rate, which would be just below average. I'm still in the camp that thinks we're slowing down to average growth.

There was lots of TV talking head hand-wringing about the negative savings rate highlighted in the report, but one must remember all of the things that are excluded from the calculations of savings: pension plans, changes in value of assets already owned, and other savings vehicles. Putting money in a 401k plan is not savings? Of course it is, but not according to the bureaucrats who maintain these reports. So whenever you hear that Americans don't save, think of someone with blinders on who insists on keeping all of their money in a passbook savings account paying 1%.

A continuing story in this recovery is that rate of increase in benefits costs have outstripped wages, depriving workers of more take-home pay, especially because productivity increases have been so good. But the Employment Cost Index showed what I hope is a change for the better. For the first time in quite a long time, wages were up +0.7% and benefits were up +0.5%. There have been some quarters where benefits costs rose at a rate three times that of wage costs. This is just one report; it's good news if it is sustainable. For the last four months, however, wages were up +2.7% and benefits were up +3.4%.