Despite the recent spate of positive news, I still encounter a consistent narrative in the media: The economy sucks, you’re screwed, and it’s Washington’s fault.

Hey, it’s an election year. I get it. But smart investors deal with the facts. And the latest facts in the U.S. about jobs, inflation, consumer sentiment, and even politics should give you cheer.

Last Friday, we got data reflecting blockbuster jobs gains. This week, the latest readings of the Consumer Price Index (CPI), released Wednesday, and the Producer Price Index (PPI), released Thursday, showed inflation is on a downward slope. And this Friday, we received additional good news: evidence of a more confident consumer.

Consumer sentiment in the U.S. improved in early August, with the University of Michigan’s Consumer Confidence Index climbing higher to 55.1 from 51.5 in July. This reading came in better than the market expectation of 52.5.

Consumer spending represents about 70% of U.S. gross domestic product (GDP), so the confidence of consumers is a powerful, widely watched indicator.

The latest consumer confidence reading is five index points above the all-time low reached in June. All components of the expectations index improved this month, which is significant because inflation, while easing, still remains elevated.

The markets responded favorably. After the opening bell Friday, the major U.S. stock market indices were extending their gains, with the S&P 500 on track for its best eight-week period in more than a year. The index has currently recovered about 50% of its bear market loss.

Are we witnessing a “bear market rally” that’s doomed to fizzle out? I think that’s unlikely. Factors seem to be in place for continuation of the summer surge in stocks.

I’m no babe in the woods. I used to work in Congress as a staffer. That’s why the real shocker for me was the emergence of two pieces of landmark legislation that are good for the economy and investors, and by extension good for the country.

The mood in the nation’s capital is more toxic than I’ve ever witnessed, even worse than the Nixon era. Compared to today’s clowns, Richard Nixon was Marcus Aurelius.

And yet, despite the squabbling, lying, ignorance, and invective that resonates in the marbled halls of the Capitol these days, lawmakers were actually able to stop tweeting long enough to pass two sweeping bills: the CHIPS and Science Act, which provides more than $52 billion for U.S.-based companies producing computer chips, and the Inflation Reduction Act (IRA), which addresses health care, taxes, and green energy.

Certain blowhards continue to rail against CHIPS and IRA, of course, but they’re in a minority and it’s not on the merits. It’s out of partisan spite (and for TV ratings). The final verdict on the intrinsic worth of CHIPS and IRA isn’t determined by the preening pundits; it’s by the pragmatic traders in lower Manhattan. And, for the most part, Wall Street approves of these bills (they wouldn’t have gotten passed otherwise).

Stocks on a winning streak…

The S&P 500 index has risen about 15% from its mid-June low. Reports of cooling inflation provide hope that the Federal Reserve will soon ease tightening.

Keep in mind, the recent waning of inflation doesn’t alter the fact that the Fed will continue to tighten this year. But it appears that the magnitude of those rate hikes will be less severe.

Read This Story: Inflation: When Good News Is…Good News

Adding to the CPI data pointing to moderating inflation, the PPI, a key gauge of wholesale prices, declined by more than expected in July, for the first time in more than two years (see chart).

The price index for producer final demand, released Thursday, declined 0.5% from a month earlier and rose 9.8% from 12 months ago, down from 11.3% in June. As with the CPI, falling energy costs were the major driver behind the PPI’s auspicious move. The PPI is a leading indicator, so it packs a lot of clout.

The upshot: It’s time to get cautiously bullish. Start scooping up the bargains on your shopping list of stocks.

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John Persinos is the editorial director of Investing Daily.

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