Second-quarter corporate earnings reports are looking quite nice, thank you, but a number of companies posting solid earnings growth are talking down third quarter expectations at the same time. Is the economy slowing that much? Suppliers to the giants aren't reporting a slowdown in orders, so what gives? Fear of the Fed may have something to do with this. If boffo earnings caused the stock market to take off, the Fed might be more prone to raise rates next month. Nobody wants that.

The good news is that consumers are definitely spending less, bless us. But business inventory build-ups added almost a full percentage point to second-quarter GDP estimates. Growth came in a a robust 5.2%, but estimates for the first quarter were revised downward from 5.5% to 4.8%. Inventory build-ups can be expected in a slowing economy, and some lingering millennium hang-over distortions may have had an effect as well. The GDP deflator was up only 2.5%. In case you choked on the 10.0% increase in durable goods orders, most of it was ever-volatile aircraft and defense. Don't forget that a jet ordered today may not be delivered for 2 years.