Federal Reserve Board chairman Ben Bernanke now has two reasons to disappoint those who are hoping he will use his speech next week at the conclave of central bankers in Jackson Hole, Wyoming, to launch the good ship QE3. The first is that the economy continues to move ahead, albeit at a slower rate than is needed to bring the unemployment rate down significantly. Retail sales have been reasonably good; share prices, with the notable exception of Facebook, are matching (well, almost) the dreams of avarice of those traders operating in this low-volume, summer market; and the economy is growing, perhaps at an annual rate in excess of 2 percent.

The much watched housing sector also seems on a steady path to recovery. Sales of existing homes rose by 2.3 percent in July from June, and by 10.4 percent from last year. The average price of previously owned homes, $187,300, is now 9.4 percent higher than last year, the biggest jump since January 2006. Better still, the supply overhang of existing homes is at its lowest level relative to sales since February 2006.