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The economic pieces appear to be falling into place as the old year winds down. On point, retail and housing data remain largely positive, while consumer confidence is gaining strongly, along with stock prices and home values.

The interesting parts of the labor report was what happened away from the headline payroll number (which virtually hit expectations at up 178k). The unemployment rate spiked down to a 4.6%, well below the Fed’s definition of the "full employment" rate, and only 2 tenths above the lowest unemployment rate in the boom that preceded the financial crisis.

Only history will tell us whether this remarkable equity rally since Trump’s election is justified or not. But, in the meantime, it hard to stand apart from this massive shift from bonds to equity.

As we opined three months ago, inconsistency is still a hallmark of this long and winding economic expansion. At the time, we had noted that “the upturn’s choppiness has been a long-term affair, having been the case in both 2014 and 2015.” We also had suggested then that such inconsistency likely would prove to be the rule in 2016.

The economy moves into the homestretch of 2016 in fairly good shape. True, we are unlikely to see a repeat of the 2.9% rate of gain tallied in the third quarter, as the recent lift from inventory stockpiling may not be sustainable.

Last Friday the yield on the benchmark ten-year US Treasury reached an 11-month high of 2.15%. This morning the yield scaled 2.34% although it has now dropped back to 2.29%.

The jobs picture continues to brighten. The improvement is not coming in dramatic fashion, to be sure, but it is evolving in a stable enough way to suggest that the long business upturn will remain on track. As to the latest report, October saw the nation add 161,000 jobs—or just below the average monthly increase so far this year.

If you would have told me that 2 days after an upset Trump victory the Dow Jones Industrial Average would sit at an all-time high, I would asked: "What are you smoking?" But that is indeed the case. Is it rational? Yes, if you put on your rose-colored glasses and believe that Trump will be a much different president than he was on the campaign trail.

The economy’s third-quarter turnaround arrived on schedule, with the 2.9% gain in the U.S. gross domestic product, in fact, surpassing expectations. Encouragingly, this was the first time in a number of quarters that results had exceeded consensus views. It also was the economy’s best showing in two years.

As I predicted last week, the Fed used this week’s FOMC meeting to tee up a December rate hike, and the data we received from the labor department this morning did nothing to change that forecast.