The apparently small number (2,500) of new jobs created last month was an inevitable “correction” after almost unbelievable strength over the past year.

Growth is “steady as she goes”, with a reduced probability of an official interest rate hike any time soon.

With GDP growth accelerating, slowing jobs growth implies sharply rising productivity. With mining exports seemingly unblocked at present and recovery in rural Australia there are two major structural reasons to expect a productivity surge.

The positive implication of all this was reinforced yesterday by Treasurer Peter Costello. The Treasurer is very confident about (goods and services) inflation: “My own belief is that inflation remains constrained and consistent with our target.”

Rio has made a record bid for Alcan, showing its strong faith in the continuation of the China boom.

The Dow Jones index rose in New York by more than 2% and it will be a boomer of a day for stock prices in Asia, including Australia. Clearly asset price inflation is alive and well, and the eventual correction will cause serious heartburn.

But we might just as well enjoy it while it lasts, gentle readers.

Read more at Henry Thornton.