The economy is doing just fine

Recent economic releases show convincingly that the U.S. economy is back on the slow-growth path that has prevailed for most of the current recovery, after some notable weakness in the first quarter. It's even possible that the pace of activity has picked up a bit.

Mortgage lending for new purchases has picked up significantly. In the past three months, as shown in the chart above, the Mortgage Bankers Association's index of new mortgage purchase applications has risen over 15%. This confirms other data which show that the residential housing market has strengthened.

According to Case-Shiller, home prices in 20 major metropolitan markets have risen over 30% in the past three years.

ADP's estimate of private sector payroll gains in June ticked up, and that suggests that tomorrow's payroll number is going to be about what the market expects: +233K. This is very much in line with the average pace of gains over the past several years.

The ISM's index of manufacturing activity came in close to expectations, and as the chart above suggests, this points to clear acceleration of growth in the second quarter relative to the first. It further suggests the economy is growing at a 2-3% pace, which is what it has done on average since the recovery began.

The only sign of weakness in the ISM report was export orders, shown above. But it's not really a weak number, it merely suggests that export activity hasn't changed much on the margin in recent months.

The ISM employment index jumped significantly, and is consistent with businesses being relatively optimistic about the future.

Manufacturing activity has picked up in the Eurozone this year, which is also encouraging.

Announced corporate layoffs have been relatively low for the past 5 ½ years. This suggests the economy's fundamentals remain healthy. 

Both residential and nonresidential construction spending rose over 8% in the 12 months ending May, 2015. This represents a welcome acceleration from the 5.5% annualized pace of total construction spending in the previous four years.

Markets are nervous these days, especially about Greece. But continued steady growth in the U.S. economy far outweighs any economic ripples that might emanate from that relatively tiny Mediterranean country.