Jobs boost driving force for US

INVESTORS are this week anticipating confirmation that the US economy is firmly on a growth track with high expectations for a turnaround in the labour market and continued upbeat testimony from Federal Reserve chairman Alan Greenspan.

Economists expect the government to say on Friday that the haemorrhaging of jobs ended last month, with non-farm payrolls up by 25,000 and marking a surprisingly strong recovery from late last year when job losses topped 250,000 in a single month. But February's unemployment rate may have risen to 5.7% due to a seasonal influx of job seekers.

Job losses have been heading down for the past few months but few economists expected to see a rise in vacancies so soon. However, recent economic data have suggested a much stronger late winter performance than expected.

One strong point is productivity, which held up in the recession. On Thursday, the fourth-quarter estimate is expected to be raised to 4.2% as unit labour costs fell 1.8%.

Greenspan will testify before Congress again this week, completing the second leg of his semi-annual monetary policy report. He speaks to Congress on Thursday and is likely to address the exceptionally strong economic data released last week in the wake of the first phase of his testimony.

Data supplied by Thomson Global Markets