U.S. Economy Keeps Soaring

The U.S. economy, new numbers show, rang up its best quarter in nearly 15 years, reports CBS News Correspondent Anthony Mason.

With fourth quarter 1998 GDP at 6.1% and inflation at just 1.6%, it was the best combination of strong growth and low inflation in decades. The last president to see inflation levels this low was Harry Truman.

But some economists are beginning to wonder how long all this prosperity can last.

John Williams of Bankers Trust, says "The economy is even stronger than we thought it was a month ago. The real question is, at this point, is the economy too strong for its own good?"

It's so strong, economists like Williams worry that a shortage of workers will start driving up wages, raising inflation from the dead.

Inflation's ghost haunted Federal Reserve Board Chairman Alan Greenspan's testimony in Congress this week. While he said that "No evidence of any upturn in inflation has as yet surfaced," he hinted he's ready to move if the economy doesn't downshift.

Williams says "The greater fear to the U.S. economy is not that it slows down, but that it doesn't slow down. Because if it doesn't, the Fed is going to have to raise interest rates."

Interest rates on bonds and treasury bills have already started to sneak up, which has affected mortgage rates. The average 30-year fixed rate rose for the fourth consecutive week to 6.89%.

Housing construction continues to boom, though. And analysts say the U.S. economy won't slow down until something makes American consumers put their wallets away.