Business Abroad Drives U.S. Profits

The Wall Street Journal reports:

While the U.S. economy is struggling, U.S. corporations aren't.

A third of the way through the second-quarter reporting season, earnings at companies in the Standard & Poor's 500-stock index are the highest in four years, according to S&P analyst Howard Silverblatt, who predicts the second half will be even stronger. Yet there is little indication that the strong results will jump-start the U.S. economy and get the millions of Americans idled by the recession back to work.

About three-quarters of the companies that have reported so far have done better than analysts expected. Many of them—ranging from manufacturers Honeywell International Inc. and Caterpillar Inc. to drug maker Abbott Laboratories—raised their earnings forecasts for later in the year.

Corporate profits—one of the few areas of strength in the limp U.S. recovery—appear to be weathering the economy's soft patch. But the gains in many cases have come from international operations, particularly in emerging markets that aren't struggling with the debt problems and other uncertainties that have consumed policy makers in the U.S. and Europe.

Just a reminder to those who like high taxes and big regulation: jobs can and will go elsewhere.