Hopes for recovery in the US

IS THE US economy going from bad to worse, or levelling off in preparation for a rebound? Wall Street will get some clues this week with the latest unemployment numbers and a round of secondary economic data.

On Friday, the Commerce Department is expected to report that America shed 200,000 jobs last month, less than half what was lost the previous month but still a fast pace. The jobless rate itself is expected to rise to 5.5%.

The labour market data will follow second-tier releases that analysts say may show some sign the economy is poised for recovery in the not too distant future.

Today's release of the National Association of Purchasing Managers index of factory activity is expected to show a rise to 42.5 from 39.8, which would reverse a downward trend. Stocks have been so depleted that factory orders are thought to be rising and should show an increase of 1.4% for October when the figure is released on Thursday.

Personal income is expected to be flat with consumption rising at a modest 2.3% when those figures come out today.

Federal Reserve chairman Alan Greenspan will speak about globalisation at a dinner on Wednesday, giving the world's most important central banker a chance to review the state of the global economy. Economists expect the Fed to opt for an 11th rate cut this year when it meets mid-month.

Data provided by Thomson Global Markets