The Runaway Economy

Friday's economic numbers were good all around. Unemployment held steady during December at a 30-year low, 4.1 percent, as 315,000 jobs were created. Usually, that would get Wall Street worried about inflation.

Not yet. The Dow soared 269 points to close at a record high Friday. And the NASDAQ, which took a beating this week, had its biggest point gain ever. CBS News Correspondent Anthony Mason reports it was a week for the strong.

You could watch the rollercoaster ride on the 900 faces across the cavernous trading floor of Warburg Dillon Read. But in all the week's dips and rallies, "there was no panic on these floors," claims John Costas. "There really wasn't."

According to Costas, Warburg's chief operating officer, volatility is now a way of life.

Does that mean we have to get used to this?

"Yes," Costas says. "And it shouldn't scare people. And it shouldn't create any fear for the underlying health of the market."

After it's Tuesday freefall, the Dow recovered to close at a new high Friday. The NASDAQ was a different story. After plunging 10 percent mid-week, Friday's rally could erase only half of those losses. By week's end the damage, especially to the dot com's, was severe. Wall Street has a polite word for a 10 percent pull-back -- it's called a correction. But the treatment for many tech stocks was downright rude.

Lucent, the world's largest telecom equipment maker, fell 30 percent, after announcing disappointing earnings. Amazon.com, the e-tailing giant, also had disappointing numbers. Its stock has fallen some 22 percent.

The economy, meanwhile, keeps roaring on. With unemployment again at a 30 year low, the job offices are empty.

"Basically, everyone who really wants a job in America right now actually has one and we're beginning to run out of warm bodies. That's what the Fed is worried about," says Bruce Steinberg of Merrill Lynch.

Fed chairman Alan Greenspan believes that could start to push up wages and re-ignite inflation, so most agree an interest rate hike is inevitable. "But they're gonna go up," says Costas. "And go up as much as a full percentage point throughout the new year."

Meanwhile, the Fed tries gently to apply the breaks to an economy that refuses to slow down.