For three years, the U.S. economy has been carried by the consumer. In 2004, the U.S. economy will be carried by capital spending and exports. U.S. exports will benefit from the relatively lower U.S. dollar and from more rapid growth around the globe, which is itself a direct reflection of the surprisingly rapid growth in the U.S. in the second half of 2003. Capital spending will be led by double-digit gains in purchases of high-tech equipment, something that started happening in the second quarter of 2003. But this year it will be joined to a certain extent by increased purchases of more traditional machinery and equipment. Faster growth and a pickup in the rate of the utilization of industrial capacity will be accompanied by the lagged effect of lower interest rates and a 50% bonus depreciation allowance. What about those GDP-driving consumers? They're just about to run out of gas. For three years, consumers have spent more than they have made. To some that's welcome bullish behavior, showing that consumers have retained their overall optimism, with some assist from the 2001 and 2003 tax cuts, in the face of the 2001 recession, the Sept. 11 attacks, higher food and energy prices, and skyrocketing medical-care bills. But this can't continue forever. Consumers can't continue to turn the increases in home equity value into cash. Of course, if you think home prices will rise another 9% this year, then maybe the merry-go-round has another whirl left in it. However, despite the recent strength in both housing starts and home sales, I believe the carousel is about to slow. It's possible that short-term interest rates won't rise this year because of an election-year agreement between President George W. Bush and Federal Reserve Chairman Alan Greenspan. But even if short-term rates don't rise, continued rapid growth and concern about unending budget deficits will send bond yields and mortgage rates higher. And that will be the end of the day for many overextended consumers. I expect the U.S. unemployment rate will continue to fall this year, at least matching the 0.5% drop in the second half of 2003, and quite possibly falling as much as a full percentage point. The problem is not the number of jobs. It's the wages that they pay -- or the amount that the newly self-employed earn. This year, wages and salaries will hardly keep up with the cost of living, at least as measured by what people actually pay for their market baskets of goods and services, as compared to what the U.S.. Bureau of Labor Statistics says they pay. The lack of enthusiasm by consumers to step up their purchases of goods and services even more this year will cause further downward pressure on retail prices and retail profit margins and result in a further increase in imports relative to domestic production. That will permit the Fed to keep interest rates low and for Detroit to continue to offer "zero interest rate" financing on vehicles from time to time. But profit margins for those domestic firms that produce consumer goods will continue to be squeezed. Perhaps this mediocre performance by the consumer won't get a lot of attention because of the strength in capital spending and exports this year. But when interest rates start to rise in earnest in 2005, boosting the value of the U.S. dollar back above equilibrium and cutting the growth in capital spending off at the knees, look out below. Michael K. Evans is chief economist for American Economics Group, Washington, D.C., and president of the Evans Group, an economics consulting firm in Boca Raton, Fla.