As I indicated, I expect that household spending will continue into 2003 and 2004 at a pace consistent with a strengthening recovery. Probably the main risk to this forecast is not the state of household balance sheets but the state of the labor market, as a significant increase in unemployment might lead consumers to retrench.
At this point, however, the labor market, while not nearly as robust as we would wish, appears at least to be stable. The financial health of firms If consumers have done their part and more for the economic recovery, so far the dog that hasn't barked is the business sector.