The Federal Reserve has kept its benchmark interest rate at a record low near zero since December 2008. Federal government spending accounted for about 24% of gross domestic product last year, within 2 percent points of the highest level since 1945. The budget gap widened to a record $222.5 billion in February.

Should earnings match analysts' forecasts next quarter, they'll be about 59% higher than the 10-year average. The only other times since 1951 that the gap approached that level was in December 2006 and August 2000, near the peaks of U.S. profit and economic expansions, data compiled by Bloomberg show.

That won't kill the rally, said E. William Stone, who predicted the 2009 gain in stocks and helps oversee about $108 billion as the Philadelphia-based chief investment strategist at PNC Wealth Management.

Economic Data

U.S. economic data are surpassing expectations this year by the most since 2004, based on the average level of Citigroup Inc.'s Economic Surprise Index, a gauge of how much reports are exceeding economist estimates in Bloomberg News surveys.

"Evidence is building that we have a self-sustaining recovery," said Stone. "There are corporate profits. There's the fact that consumer spending is there. Things are getting better."

U.S. consumer purchases rose more than forecast in February, while a Labor Department report on April 1 showed employers created more jobs than estimated in March and the unemployment rate fell to a two-year low of 8.8%.

The world economy will probably expand 4.4% this year and 4.5% in 2012, according to January forecasts from the Washington-based International Monetary Fund.

Private Demand

Private demand may spur growth after more than $12 trillion pumped into the financial system by governments and central banks lifted the global economy out of its first contraction since World War II, according to Linda Duessel, the equity market strategist at Federated Investors, which oversees $358.2 billion.

"We see accelerating growth around the globe," Duessel, who turned bullish on U.S. stocks at the beginning of 2009, said in an interview from Pittsburgh. "That helps to continue to propel earnings. This market looks cheap to us."