RJ and Makay

The economic recovery in developed nations, though far from spectacular, is going pretty much as expected. And according to the latest monthly Reuters poll of world economists, the United States will continue to lead the way economically, with the Euro zone, Great Britain, and Japan trailing far behind.

The U.S. economy should grow 3.1% year-on-year in both 2011 and 2012, poll respondents project. Japan, meanwhile, is expected to struggle to top 0.5% growth per quarter for the foreseeable future unless rising oil prices prompt a quicker exit from deflation.

The outlook at small U.S. companies is more positive than it's been in several years. In February, the National Federation of Independent Business (NFIB) index of small company optimism rose to 94.5 — its highest level since December 2007. The index also isn't terribly far off the average of 100.7 it posted during the previous expansion that began in November 2001.

“The future is looking brighter for a few more small-business owners,” comments William Dunkelberg, NFIB chief economist. Still, he notes, “this is not a reading that characterizes a strongly rebounding economy.”

In an important sign that the economy is beginning to expand, companies are increasingly seeking loans and banks are more frequently saying "Yes."

In the last three months of 2010, for example, U.S. Bancorp wrote $8 billion in new business loans — its largest volume in two years — and JPMorgan Chase added 400 midsize companies to its client list. According to the Federal Reserve, bank loans overall grew for the first time in two years. "Companies are talking about growth in ways they haven't for three years," relates Perry Pelos, head of Wells Fargo's commercial banking unit.