Take business investment, for example. Companies are heavily investing in new technology. Some of the spending is related to the need to update computers for the year 2000. But some of it is simply corporations expanding to stay current. Although business spending for the quarter was up about 5 percent, it slowed slightly in September.
Consumer spending remains vibrant as well.
Merrill Lynch estimates retail sales are rising at a 4 to 5 percent rate. Higher interest rates have yet to keep consumers from using charge cards. In addition, consumers appear to be managing their credit-card debt better. Last month, the American Bankers Association reported delinquencies hit a four-year low as more consumers made their monthly payments on time. Eight Years of Positive Statistics Consumers improved financial condition is mainly related to the strong economy.