NEW YORK (AP) — Europe appears on the brink of another recession. Islamic militants have seized Iraqi territory. Russian troops have massed on the Ukraine border, and the resulting sanctions are disrupting trade. An Ebola outbreak in Africa and Israel's war in Gaza are contributing to the gloom.
It's been a grim summer in much of the world. Yet investors in the United States have largely shrugged it off — so far at least.
A big reason is that five years after the Great Recession officially ended, the U.S. economy is showing a strength and durability that other major nations can only envy. Thanks in part to the Federal Reserve's ultra-low interest rates, employers have ramped up hiring, factories have boosted production and businesses have been making money.
All of this has cushioned the U.S. economy from the economic damage abroad. And investors have responded by keeping U.S. stocks near all-time highs. Not even reports Friday of a Ukrainian attack on Russian military vehicles unnerved investors for long, with blue chip stocks regaining nearly all their midday losses by the close.
"We're in a much better place psychologically," says Mark Zandi, chief economist at Moody's Analytics. "And it's allowing us to weather the geopolitical threats much more gracefully."
Still, the global turmoil comes at a delicate time.
China, the world's second-biggest economy, is struggling to contain the fallout from a runaway lending and investment boom that's powered its growth since before the 2008 financial crisis. The economies of Japan and Germany, the world's third- and fourth-largest, shrank in the spring. So did Italy's.
It might not take much — an oil-price spike, a prolonged recession in Europe, a plunge in business or consumer confidence — to derail the global economy.
Here's a look at the strengths and weaknesses of the U.S economy and others, and why the calm in markets may or may not last:
— MORE JOBS
Hiring in the United States has surged in the first seven months of this year.
Monthly job gains are averaging a solid and steady 230,000, based on government figures. That's roughly an average of 35,000 more jobs each month compared with last year.
Fewer people are applying for unemployment benefits. And fewer new hires are working as temps. Both trends suggest stronger job security.
Economists say the cumulative effect of all those additional paychecks should propel growth and help insulate the U.S. economy from trouble abroad.
Though low-paying industries account for much of the hiring, many economists foresee more jobs coming from higher-wage industries such as construction, engineering and consulting.
Zandi expects monthly job growth to accelerate to an average of 275,000 sometime next year.
— RECORD PROFITS
Earnings at companies in the Standard and Poor's 500 index are on track to jump 10 percent in the second quarter from a year earlier, according to S&P Capital IQ, a research firm. That would be the biggest quarterly gain in nearly three years.
That news has helped the S&P 500 index climb nearly 6 percent this year, extending a bull market into its sixth year. The gains have been remarkably steady, too. The stock market hasn't suffered a "correction" — a drop of 10 percent — in nearly three years, twice as long as is typical.
Still, some markets outside the U.S. are falling.
Japan's benchmark Nikkei 225 is down 6 percent this year. Germany's DAX has lost nearly 5 percent, and France's CAC 40 is down 3 percent.
At the same time, global investors have been pouring money into U.S. Treasurys, long seen as a safe bet in troubled times. The yield on Treasury notes maturing in 10 years, which falls when demand rises, hit 2.3 percent on Friday, its lowest level in more than a year.
Christine Short, a director at S&P Capital IQ, worries that more grim news from abroad could send U.S. stocks tumbling. "Markets are ripe for correction," she says. "The only question is, What is the catalyst?"
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