Remaining economic and market bears may soon be forced into hibernation.  Even the most obstinate of naysayers may have to acquiesce to the improving economic outlook.  As is the case every four years, the primaries have taken center stage in the media and most of what we hear is the obligatory bashing of the economy and the current administration’s economic policies. 

The market continues its sideways movement as the numbers from business and government continue adding to the case that the recovery is real and sustainable.  But everyone, from individual investors to institutional giants, from small businesses to mega-corporations, from the Federal Reserve to the Administration, remains cautious on the future of this economy.

Yesterday, the Labor Department reported that productivity grew more than twice as fast in the second quarter than in the previous three months as the economy accelerated.  The increase of 5.7% was considerably over analysts’ estimates of 4.1% and the fastest since the third quarter of last year. 

All data last week provided upside surprises, a rare event over these past few months when the overwhelming dynamic was the economy's adjustment to the overhang of excess inventory. The data not only suggest an turning point but also support the notion that the weakest quarter in the cycle was Q2.