n at the bottom of the 1991 recession (Market News, Greenspan: Worker Insecurity now more than in last recession by Chris Middleton). It is a "pivotal period," Greenspan went on, that is a direct result of the development of the transistor after World War II. "It brought us the microprocessor, the computer, satellite and the joining of laser and fiber-optic technologies." The average worker can no longer obtain skills in high school that will be a sufficient support for an entire career, he noted. For this reason, technological changes make many workers concerned about job security, and as a result, excessive wage increases do not come into view. Wage inflation is only 3.6percent for the twelve-months ended in February, and after adjusting for productivity gains, labor costs to employers are still low. Consumers remain in a buying mood — and February car sales were at their strongest pace of this economic expansion (First Union, Monthly Economic Outlook, March 7, 2000). Rising incomes and wealth have increased consumers' willingness to spend and take on more debt. So far, the rise in gasoline prices has not dampened car and truck sales. However, the effect of higher fuel costs could show up in weaker vehicle sales this spring. Consumer debt levels have increased sharply in recent months but remain manageable (First Union, Monthly Economic Outlook, March 7, 2000). Debt levels only become a problem when unemployment rises and consumers begin to worry about their ability to make debt payments. Here is another area of the economy that is vulnerable to unexpected negative news. The increase in consumer spending shows that Fed rate hikes have not yet cooled this vital sector of the economy, but the increased debt burden also indicates that a slowdown in consumer spending may not be too far in the future. The economy continues to grow faster than the Fed would like. In my opinion, the strong demand for goods and services cannot be indefi...
