The recession is history. At least Federal Reserve Board chairman Alan Greenspan says that's the case. And U.S. Treasury secretary Paul O'Neill during his recent tour of the Middle East denied that the world's biggest economy even fell into recession.

Of course, whether the economic downturn was severe enough to merit an official recession label is somewhat beside the point. Millions of workers lost their jobs, personal bankruptcy filings hit a record level, and business investment cratered.

Still, I’ve consistently argued that a fundamental transformation of the economy over the past decade—a technology-led productivity boom, the spread of equity ownership, organizational changes geared toward creating a more flexible company, and labor market innovations—would limit the first downturn of the Information Age. Resilient American consumers also shored up the economy during the downturn as they bought cars, homes, and other goods at a sturdy pace in recent months.

But that consumer spending spree is now a concern. A number of economists have pointed out with alarm that the consumer debt burden as a share of disposable income is just shy of a record high. The personal savings rate is barely in positive territory. The worry is that household finances are stretched far too thin. The fragile economic rebound could collapse as cash-strapped consumers sharply rein in their spending this year.

But the consumer is in better shape than this dark scenario suggests. Americans are not spending with abandon, mindlessly trying to drown their fears with visits to the shopping mall, taking on credit card debt that they can ill afford. For one thing, consumer spending is robust because wages and salaries—adjusted for inflation—are up sharply for employed adults.

The U.S. savings rate is also understated. Last year the official savings rate was 1.6 percent. But the personal savings rate excludes capital gains. If you include capital gains—as many economists argue is the right approach—that figure would be 8 percent.

To be sure, there are pockets of severe financial stress, especially among low-income households. But overall the American consumer is in decent financial shape.