New unemployment claims fell sharply the week before Christmas despite widespread weather problems that were putting a drag on business activity. Early numbers suggest that retail sales were up for November and December, justifying the increase in business inventory during the third quarter. This would be in line with the declining layoffs, if inventory sold as predicted as more production will be required in January.
The Federal Reserve is cutting its $85b per month QE3 bond buying program by $10b in January and this is causing bond interest rates to climb. But so far this has had no negative effect on the stock market that continues to set records. At $75b we're still talking about the better part of a trillion dollars a year in stimulus. Of course this is 'soft stimulus' that mostly ends up as bank balance sheet entries.
If the government would spend $1t per year on infrastructure the US would be booming like China, instead of drifting toward becoming a third world colony of the People's Republic of China. Did I mention they have a rover named the Jade Rabbit on the moon? Twenty years ago there were almost no private cars in China, now the 'commies' are a bigger market for cars than the US. In five years their economy will be bigger than the US across the board.