THE ECONOMY: It Ain't Over Till It's Over

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If last week's news from the Labor Department is any indication, the longest economic expansion in peacetime history still has plenty of life left in it. The unemployment rate dropped in April from 6.6% to 6.3%, its lowest level since early 1980. Even with 7.5 million Americans still jobless, the economy is "much stronger than anyone thinks," says Allen Sinai, chief economist of Shearson Lehman Bros.

But the outlook remains marred by the weak dollar and slumping bond prices. The employment report may lead the Federal Reserve Board to conclude that the economy is strong enough to withstand a further rise in interest rates, which would defend the dollar and guard against an acceleration of inflation.