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But for all the good news, many economic forecasters remain worried about the broader global imbalances. The United States' large trade deficit, which exceeded $600 billion last year, is expected to widen in 2005 and increase the country's enormous foreign indebtedness.

Exports are unlikely to redress that balance this year, most analysts predict, because Europe and Japan are growing at anemic rates in comparison with the United States.

That means American demand for imports is likely to expand much more rapidly than European and Japanese demand for American exports. And with American imports almost twice as great as exports, America's exports must grow far more rapidly to even begin a reduction in the trade deficit.

"The world is still too dependent on U.S. spending," said Nigel Gault, an economist at Global Insight, a forecasting firm, in Lexington, Mass. "We're still increasing imbalances in the global economy, so the U.S. is still increasingly dependent on the inflow of foreign capital."

As Businesses Step Up Spending, Some See a Just-Right Economy
By EDMUND L. ANDREWS and EDUARDO PORTER

WASHINGTON, March 7 - Nearly five years after the last economic boom sputtered out, executives and investors are again talking about a rebirth of the Goldilocks economy.

The Goldilocks economy - not too hot, not too cold - was never a perfect metaphor even at the height of the 1990's. For all the strong growth and low inflation of the 1990's, the economy and the stock market were both overheated by the time the stock bubble collapsed in March 2000.

But a wide variety of indicators now suggest that the economy is in a sweet spot: business investment is soaring; inflation appears more moderate than a few months ago; employment is climbing, even if real wages are not.