This data will tell us little about the economy going forward.

I wouldn't be surprised to see more weakness in the September report.

For the Fed ... they know there will be disruptions in September from Katrina, but policy is forward-looking and takes six months to have any effect. If the Fed can withstand the political heat, they will stick to their guns with a quarter-point rate hike.

Today's report simply reinforces the belief that it will be 25 points instead of 50 points.

In general, the economy is proving to be resilient to energy and gas price pressure. It's on a growth path. Even though oil prices are higher, the fundamentals of the economy are strong. Therefore, we see consumers' savings rate falling and spending up.

It's the impact from Katrina, which in the first few weeks will be at a maximum, and it does increase our confidence that we will see a hit to the other sentiment indexes in September.

The net effect on the economy is always positive. We have more consumers of energy than producers and the result is that the sector that benefits from low inflation and low interest rates comes out ahead.

Consumers are always concerned about the economy but the key is whether they are predisposed to increasing caution when it comes to spending. I think today's report demonstrates that the hurricanes had an ambiguous affect on spending.

Overall, the damage from the hurricane on the economy is limited, and by November and December we will start seeing the positive effect on production from rebuilding.