June 9, 2009 3:00 am
President Barack Obama stepped up the pace of Washington's stimulus spending yesterday with plans to create or save 600,000 jobs over the next hundred days - four times the rate achieved in the $787bn package's first 100 days.
The announcement, which followed last week's news that 345,000 US jobs had been lost in May, a significant deceleration from earlier months, coincided with a forecast yesterday that the major industrialised economies, including the US, could soon emerge from recession.
The report from the Paris-based Organisation for Economic Co-operation and Development pointed to a possible recovery by the end of the year. Consensus forecasts in the US point to a bottoming out by the third quarter.
"It is still too early to assess whether it is a temporary or a more durable turning point," said the OECD. But the data "point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom".
Mr Obama, who is under growing political pressure to show that his spending plans are well directed, yesterday pointed out that the number of jobs lost last month, although "still too many", was the lowest total since September.
"We are moving in the right direction," said Mr Obama, after unveiling 10 stimulus spending plans for the next 100 days. "The key is for us to build on the modest progress that has been made, in the months to come," he said.
The OECD reported in its latest monthly analysis of forward-looking indicators that a "possible trough" had been reached in April in the more developed countries, which make up almost three quarters of the world's gross domestic product.
The composite leading indicators index for the 30 economies that are part of the OECD rose 0.5 points in April, the second monthly rise in a row, after falling for the previous 21 months.
The index seeks to identify turning points in the cycle about six months in advance.
The OECD said that its overall measure for advanced member economies pointed to "recovery" instead of the "strong slowdown" they had been suffering since last August.
A total of 22 of the 30 OECD countries saw a rise in forward-looking measures of activity. The US saw its first improvement since July 2007, while Germany and Japan saw an improvement for the first time since early last year.
China saw a "possible trough", while India, Brazil and Russia still faced a sharp slowdown.
In the US, the Conference Board said its employment trends index rose to 89.9 last month from 89.7 in April.
"The moderation of the last two months is certainly a sign that the decline in job losses is real and signals that the worst is over," said Gad Levanon, Conference Board economist.
Hint of recovery, Page 4 The Short View, Page 15 www.ft.com/obama
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