Some encouraging economic news has come out recently. The U.S. is seeing GDP growth accelerating, employment increasing and consumer sentiment strengthening. This last sign has many analysts—again—heralding the triumphant return of the free-spending U.S. consumer and a big boost to consumer stocks.

We would be the first to cheer if we believed this were the case, but the cold, hard reality is that while some economic numbers look pretty good, pretty good isn’t great.

Many Americans still have debt from the meltdown, and the shock of it has turned many spenders into savers. Savings rates in the U.S. and Europe are rising, which sucks cash away from goods consumers want but don’t necessarily need.

That’s why Global Income Edge has selected consumer-defensive stocks that will benefit first from the improving spending in the U.S., the recovery in Europe and elsewhere. Companies such as Unilever (NYSE: UL), which yields 3.1% and has iconic brands such as Dove soap, Lipton Ice Tea and Ben & Jerry’s ice cream, should benefit as consumers crack their wallets a bit for a few more must-haves.

The company, which reported a 6.8% rise in 2014 profits in January, has noted that the U.S. is growing steadily while other developed and emerging markets are not.

But as Europe and emerging markets recover, the company has predicted that earnings should substantially increase, though 2015 is expected to be a choppy year. Unilever is a buy up to $45.

We believe Europeans will be toasting the economy’s recovery if all goes well with the European Central Bank’s stimulus program. And they may choose to make that toast with perhaps a pint of Guinness, a Tanqueray and tonic, or maybe even a shot of Don Julio tequila. These come from British consumer beverage brand Diageo (NYSE: DEO), whose spirits, beers and wine are enjoyed on both sides of the pond, and whose stock is a Global Income Edge favorite.

Diageo has yet to see its sales to middle- and lower-income Americans rebound. But as consumer spending improves in the U.S., so will Diageo’s fortunes. The CEO, Ivan Menezes, has said that “when spending in everyday bars and on casual dining increases, then you will see the whole industry getting a bump.” And we believe investors could see that major bump in value in the next 12 months. DEO is a buy up to $130.

In the area of health care, Global Income Edge’s two top Conservative Holdings have been GlaxoSmithKline (NYSE: GSK) and Novartis (NYSE: NVS), which coincidentally are great collaborators. They have yields of 6% and 2.9%, respectively.

GSK has acquired Novartis’s global vaccines business (excluding influenza vaccines), which will make it the number-one vaccine producer in the world. The deal also created a new consumer health care joint venture with Novartis and divested its oncology business to Novartis. The deal has been seen as a way for each firm to focus on its unique strengths.

In fact, GlaxoSmithKline has a promising pipeline of new drugs. The experimental drug known as HZ/su is currently in Phase III trials and has been shown to reduce the risk of shingles in adults age 50 and older by 97%, a far better result than Merck’s Zostavax, at 70% efficacy. The promise of these new drugs prompted investment bank UBS to upgrade its recommendation to a buy because it expects substantial earnings growth in the next three to five years. GSK is a buy up to $54.

Meanwhile, Novartis received approval from both the U.S. Food and Drug Administration and European regulators for secukinumab, its new plaque psoriasis treatment. Analysts estimate that annual revenues for its treatment could add up to $1.1 billion in sales by 2020, putting it into the blockbuster category. The company is also banking on the anti–heart failure treatment LCZ696 to ward off competition from generics.

The Switzerland-based company said its net profit rose 12% to $12.7 billion last year. During the earnings call, Novartis’s CEO said the company’s solid sales and profit growth, and strong innovation means “I’m confident that we are positioned for future success.” NVS is a buy up to $100.

And we are also confident that having an investment in the premier American and British energy utilities is also the best way to conservatively play improving consumer spending.

There is one utility that has exposure to both the U.S. and the U.K. economic recoveries, as it has assets in both countries: U.K.-based National Grid.

With its stable yield and strong international diversification, National Grid is one of Global Income Edge’s top picks. In 2013, it took about 65% of its earnings from the U.K. and 35% from the U.S., both areas that are expected to grow in 2015.

National Grid’s earnings are forecast to grow by 6% this year, which should lead to an increase in the dividend, the yield from which is now 4.8%. Last year, the company’s CEO said he aims to grow the dividend at least as fast as the U.K.’s retail price index, which is currently rising about 3% annually.

With a 9.7% boost last year, the company far exceeded this inflation rate, while over the past five years the payout has grown 3.6% annually. National Grid is a buy up to $74.

Finally, consider Southern Co. (NYSE: SO), with a 4.8% yield.

In late February, Fortune magazine named Southern Co. to its 2015 “World’s Most Admired Companies” list. The issue marked the sixth consecutive year the company has been recognized among the publication’s top three utilities worldwide for financial soundness, value as a long-term investment and quality of management. SO is a buy up to $55.

The World in Perspective

We are excited that the world is starting to grow at a marginally faster clip, and as per our Buy American issue last month, we believe the United States will be one of the best places to invest in, as it’s furthest along in its recovery, followed by Europe. But this U.S. improvement must be viewed in the context of lower employee participation rates, tighter credit standards, a sluggish housing market and weak wage growth. Elsewhere in the world it’s a similar story, but worse, as employment and GDP growth is still alarmingly low and consumer debt is still high. That’s why we have chosen to focus on consumer-defensive stocks and believe it’s too soon to jump into discretionary stocks.

Household debt levels have fallen mainly in the countries that were affected most by the crisis, according to a McKinsey report. Ireland and the U.S. stand out, with household debt as a percent of income declining by 33 percentage points in Ireland and by 26 percentage points in the U.S.

But in most advanced economies, McKinsey found household debt has continued to grow and in some cases has reached much higher levels than the pre-crisis peaks in the U.S. and the U.K. In developing economies, household debt is generally at much lower levels, but it is growing rapidly. McKinsey found that in Thailand and Malaysia, household leverage exceeds U.S. levels. The report warns that high-debt countries could be at risk.

This is mainly the reason why global growth will likely be choppy, and it bears out in recent World Bank forecasts, which show growth increasing but at a moderate pace, from 2.6% in 2014 to 3% this year to 3.3% in 2016.