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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.

The US economy continues to blaze new paths to recovery. The week’s economic reports demonstrate how the world’s largest economy can grow even in the face of enduring impediments. With unemployment near 10%, housing prices in decline for the first time in recent memory, and confidence near all-time lows, the consumer is showing signs of life. The manufacturing and non-manufacturing sectors of the economy are coming back with improving signs of strength. Recovery is young and weak, but difficult to deny.

Today’s news from the government comes as welcome relief after a week of sub-par economic reports. The economy’s fourth quarter expansion of 5.9%, higher than initially reported, ranks as the best performance in six years, according to the Department of Commerce. The government’s initial estimate last month was 5.7%, where economists pegged the quarter’s growth. But the group most surprised is undoubtedly the US consumer whose dour mood unsettled investors earlier this week. 

The recent 8.2% dip in stock indices from their January 15th peak provides an opportunity for reflection. While market declines in general are not pleasant, one can understand investors are understandably squeamish after the 37% drop in 2008 and the peak-to-trough drop of 57% from October ‘07 to March ‘09. But ever since stock markets began, values have dropped then recovered only to go on to new heights. Our purpose today is not to predict the market’s next move, but to objectively examine its nature and demonstrate why worrying about the dips is needless and avoidable.

Stocks around the world took a turn for the worse yesterday as debt concerns from the Euro–zone mounted and first-time unemployment insurance claims came in considerably higher than expected. Today’s good news on the overall unemployment rate slowed the market’s decline, but hasn’t stopped it. The S&P is now down 7.6% from its January 19th peak; however prices remain nearly 60% above their lows of March 2009. Alternatively, US Treasuries are rising. They gained yesterday as investors fled to quality amid uncertainty in Greece, Spain and Portugal. Three to seven-year Treasuries were up .6% to .8% and 7-10 year Treasuries were up .8% to 1%. Gold fell the most since 2008, with April futures losing 4.1% to $1,066.60 an ounce in New York. The metal is down 26% from its high in early December as inflation has failed to materialize. 

Approaching President Obama’s Wednesday state of the union address, many expected he would steer a new direction, away from a decidedly liberal agenda toward the center. He obliged with more than a few promises on how he would do just that. He took a clearly more populist/centrist tone, berating bankers, rebuking congressmen and senators for partisan bickering, reminding critics of his many “tax cuts,” and doing it all in his own version of “I feel your pain.” He even nodded to the right on initiatives such as nuclear power and offshore drilling. He urged Congress to pass a new jobs bill, called for the extension of a big business tax break, and the creation of a small business tax credit. In a follow-through today, it is reported that the president plans to propose tripling loan guarantees for new nuclear reactors to more than $54 billion.