The fundamentals of the economy are, well, about as strong as they've been since the recovery began.

After a miserable start to the year, GDP grew a healthy 4 percent in the second quarter. And even better news is that the start to the year wasn't quite as miserable as we thought: first quarter growth got revised up from -2.9 to -2.1 percent. That's because job growth figures suggest economic growth wasn't that weak, and neither does Gross Domestic Income (GDI), which, in theory, should be the same as GDP, but was much better at -0.7 percent.

But the bad news is that this latest upswing isn't one so much as a reversion to the mean. As you can see below, consumer spending growth hasn't really picked up the past year. Neither has fixed investment, which aside from a polar vortex-induced slump, has been remarkably consistent.

The only thing that did change in the second quarter is what changes every quarter: inventory spending. It collapsed in the winter, and came back particularly strong in the spring.

GDP Growth2.jpg

In fact, inventories made up 1.66 of the 4 percentage points of growth this quarter. And that, unfortunately, won't carry over into the future, since businesses won't need to restock for awhile. In other words, once you account for inventories, the economy wasn't really as weak as it seemed at the start of the year, and it's not as strong as it does now. It's just been the same the whole time: meh.

You can see that if we look at GDP growth minus inventories. Sure, there have still been ups and downs, but they've been much less pronounced. Aside from a surge at the end of last year, growth has mostly stayed between 2 and 3 percent.

GDP Ex-Inventories.jpg

That's the good and bad news.