KEY DATA: Home Sales: +3.2%; Prices (Over-Year): +5.6%/ LEI: +0.2%; Phila. Fed: -3.1 points/ Claims: +13,000

IN A NUTSHELL: “Another day of data, another round of decent economic news.”

WHAT IT MEANS: The economy is doing okay, despite what some may be saying. Take the housing numbers. While the housing starts data were soft on the surface, the details made it clear that construction was not weakening. Today, the home sales numbers support that view. The National Association of Realtors reported that existing home sales rose solidly in September. The gains were across all regions, which hasn’t happened often lately. Prices increases remain strong as well. Maybe the most interesting part of the report was the break down between single-family and condos. Similar to the housing starts numbers, the single-family segment is becoming the driving force for growth in the sector.

On the manufacturing front, the Philadelphia Fed’s manufacturing index fell in October. But the details show that the sector is not weakening. While respondents indicated the region’s economy softened a bit, their businesses did better. New orders jumped, shipments surged and order books essentially stopped thinning. While hiring did not turn positive, employment cut backs and the reduction in hours worked slowed sharply. The future looks good as manufacturers expect orders to grow even faster, hiring to pick up and hours worked to expand.

Other forward-looking numbers are also pointing to further strength. The Conference Board’s Leading Economic Indicator Index rose moderately in September. The report summarized things best: “The U.S. LEI increased in September, reversing its August decline, which together with the pickup in the six-month growth rate suggests that the economy should continue expanding at a moderate pace through early 2017”.

Finally, the weekly jobless claims number jumped, but that is hardly a worry. Most economists, including myself, were mystified at how low the new claims had fallen. The current level – or slightly lower – is where we think claims will settle in. That number of new claims is consistent with solid job gains and indicative of a tight labor market.

MARKETS AND FED POLICY IMPLICATIONS: We are getting a clearer picture of the state of the economy and it looks fine. Okay, it isn’t soaring along, but given that trend is in the 2% range, we need a mindset reset on what is good growth. It is not 3.5% to 4%. That is not a reasonable range for any extended period of time. Housing is in good shape, manufacturing seems to be coming out of its funk, consumers continue to spend, third quarter earnings seem to be solid and the election is less than three weeks away, so investors should be heartened. And Fed members should have less fear of the economic future. But the election is creating uncertainty. Trump has indicated he will not reappoint Yellen, first saying she is not a Republican and then criticizing her for seemingly running monetary policy to aid Clinton. Hillary has stayed quiet about the Fed, but most expect her to reappoint Yellen when her term expires in February 2018. That means there is some disquiet about the direction of the Fed, as it is not likely Yellen will resign if Trump wins. Worse, given Trump’s political attacks on the Fed, would the person he might appoint be viewed more as a politician than a central banker? The previous two Fed Chairs worked for presidents of both parties. Politicizing the Fed is a dangerous thing to do.