Optimism for the U.S. economy is spreading through markets. That improved view is elevating fear of inflation, and pressure on long-term interest rates.
The uplifted mood is stronger than the data, but every economic turn for the better begins this way. The twin surveys by the New York and Philadelphia Federal Reserve banks show modest growth, but both show sustained increases in new orders, employment, and prices paid and received. New claims for unemployment insurance are trending down toward 400,000 weekly, the border between not-so-hot and OK.
The jaw-droppers were in housing. New-home starts fell 4.3 percent in December, sensible, but new permits soared 16.7 percent. Then the National Association of Realtors reported sales of existing homes in December, a 13.8 percent rocket up from November (not seasonally adjusted).