The Conference Board's index of leading economic indicators is "taking off"

The index of leading economic indicators is taking off, up 0.9 percent in July vs a sharply upward revised 0.6 percent gain in June (plus 0.3 percent prior). May's gain is also revised and is also at 0.6 percent (plus 0.7 percent prior).

The drop underway in unemployment claims is a leading and very convincing factor for the strength in July. The yield spread, as usual, is the month's strongest factor reflecting the Federal Reserve's stimulative monetary policy. Building permits are also especially strong but come off a very low base in June.

Strength in the manufacturing sector is another factor behind the month's gain, specifically the ISM's new orders index. The report's credit component is also strong pointing to rising demand and access to loans.

Other readings are less spectacular including a modest 0.2 percent rise for the coincident index and a modest 0.2 percent rise for the lagging index. But it's the leading index that takes the headlines in this report and it's signaling very strong growth ahead in the next six months in what will be further ammunition for the hawks at the Fed.