Profit much better than broadcast in resurgent U.S. economy

It's corporate earnings season in America, and you would be forgiven for thinking things are looking gloomy.

Company after company in the Fortune 500 are reporting what look like weak results...but don't let the headlines fool you.

Yes, some firms are feeling the heat from falling commodity prices and a stronger  U.S. dollar, which makes overseas profit look worse.

But the fact is, corporate profit in the U.S. remains at historically high levels and profit margins at record levels.

Yet that isn't showing up in the wages of corporate employees and that is where the real weakness lies.

— Amanda Lang

A batch of weak earnings reports from several major U.S. companies sparked a lot of concern on Wall Street today, with investors worrying the U.S. economy isn't as strong as they were banking on.

Among the names that fell short in the latest quarter was Caterpillar, the world's largest manufacturer of mining and construction equipment.

Often seen as an economic bellwether, the company said fourth-quarter profit fell 25 per cent from last year.  It also warned "2015 will be difficult" due to weak commodity prices.

Procter and Gamble waved the red flag, too. Sales at the world's largest maker of household products dropped 31 per cent last quarter from the year before.  And it expects to lose another $1.4 billion this year.  P&G fired blame at the U.S. dollar.

While it's great for travelling Americans, a booming buck hurts some U.S. companies trying to export products.

Dupont, Microsoft and Pfizer also said the strong dollar hampered profit.

The negative data didn't stop there.  Orders for durable goods, or products like cars or kitchen appliances, unexpectedly sank 3.4 per cent in December from the previous month. That's the fourth decline in five months.

To muddy the waters, Americans are feeling very upbeat about the economy. A measure of consumer confidence out today ranks at the highest level since 2007.

So... is that enough to spur the recovery in the U.S. economy?  Or are Americans just blind to what might be down the line?

After all, not only are hourly wages not growing, they actually fell last month.