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Employment generally begins to rise a few months or quarters into a typical economic recovery. Businesses see demand for their products and services rise faster than they can fill orders. The last bit of productivity squeezed from their workers and plant, they must hire. But when will we reach that point? We are in recovery from the ‘Great Recession?’ European debt concerns, slowing growth in China, and the greatest man-made oil spill in world history all serve to derail the chugging recovery.

Events of the past few weeks have rattled the confidence of even the most stalwart of optimists and caused more than a few to question fundamental tenets of the economy. How can millions of gallons of oil flood the Gulf and not permanently ruin that ecosystem and the livelihoods of millions of people who depend upon it? How can markets be called efficient when an aberration can cause the loss of a trillion dollars in mere minutes? How can the Euro survive a potential default by Greece and survive?

Yesterday represented the seventh down day in a row for the S&P 500’s, putting the average just 6 points above the low it reached during the technical panic of May 6th. It is 10.2% off its recent high of April 23rd and 3.9% down for the year. Long term US Treasuries on the other hand are up 9.5% since the high and 11% so far this year. Selling over the past three days was amplified when German Chancellor Angela Merkel banned some types of speculation against government bonds and financial institutions. The move was ill-received by investors in general but particularly in Europe as traders there drove the Stoxx Europe 600 Index down 7.2% in just three days. Other governments have not followed suit with the ban.

As Europe wrestles with its own version of ‘too big to fail,’ speculation is rising that the Euro might not survive the sovereign debt crisis. Greece may not be able to repay its debt in full, but the problems of fiscal irresponsibility are broader and may take more than the almost $1 trillion already pledged.

Fears of a debt contagion in Europe got the attention of US investors this week. As of Friday morning the NASDAQ is off 7.2% the S&P 500 is down 6.2% and the FTSE All US Index is down 6.5%. The S&P Europe 350 is down 11.6% for the week and 16% over the past 30 days. Worried Bond investors flocked to the relative safety of US Treasuries driving intermediate and long-term bond indices up 2.2% and 5.6%, respectively, for the week. Concerns that severe fiscal problems in Greece, and growing pressures in Portugal, Spain, Ireland, and Italy might cripple the European recovery along with reports a few forecasts that China is months away from a burnout started a selling wave that grew throughout the week.

Recovery remains firmly on track as revealed by the government’s first of three estimates on the growth of US Gross Domestic Product for the first quarter of this year. While a little below expectations, the 3.2% gain is solid and continues on the heels of a 5.6% pace set in the fourth quarter. The six months together comprise the strongest advance since 2003.

The biggest news this week on the US economy comes today as the Commerce Department announces that orders for durable goods excluding transportation jumped by 2.8%, the most since the recession began in December 2007. Other reports this week including Leading Indicators and Home sales reported this week further bolstered the view that the economy is healing.  

Globalization and productivity have all but neutralized inflation.  Profits in the US continue to surge while analysts play catch-up.  Global economic growth looks healthy as well among the G6 countries.  Earnings in Japan and Europe outpace analysts’ expectations just as they do here.  And the developing ‘BRIC’ countries; Brazil, Russia, India, and China are ablaze with growth rates as high as 10%.  

Don’t’ expect it from Washington. America’s politicians are rushing headlong into socialism faster than at any time in our young history. We who send the ‘revenues’ to Washington know all too well the cost of the last massive rush toward that cowardly form of government. ‘Entitlements’ such as social security, medicare, and medicade are in truth on pace to swamp our country’s economy in the coming decades. The tactics used by Democrats to pass “Healthcare Reform at any price” with their secrecy, unprecedented vote-buying, and outright intimidation, have made it abundantly clear to most American citizens that absolute power has indeed corrupted absolutely.

The American consumer is coming back. Sales at US retailers grew a surprising .3% in February according to a Commerce Department report released this morning, but the two previous months were revised downward. Excluding autos, February sales rose .8%, also surpassing expectations. Economists expected sales to fall .2% due to bad weather across the country.