A stronger and more widespread recovery

Both businesses and households have started to enjoy the fruits of an economicrecovery that appears to be becoming stronger and more widespread. A weightedaverage of the two ISM business activity indices rose to an eight-year high in Julywhile the Conference Board measure of consumer confidence hit a six-year highin August. This is being accompanied by more spending too.Businesses boosted their spending on capital goods in July and, although retailsales were weak in July, the faster rises in income suggest that consumptiongrowth will accelerate later this year.