20100304 0936 Global Economic News.

US services sectors accelerated in February more than anticipated according to the Institute for Supply Management (ISM)’s index of non-manufacturing businesses. The index increased to 53 from 50.5 in January. Last month’s reading was the highest since October 2007 and exceeded all estimates. However the ISM services index has lagged behind the group’s manufacturing gauge, which registered a reading of 56.5 in February, the seventh consecutive month of expansion. (Bloomberg)

The Federal Reserve reported that its latest survey of economic conditions around the country -- the "beige book" report -- shows continued growth but little job creation. The beige book, based on what business and banking contacts told the 12 Federal Reserve Banks, says the economy "continued to expand" through February 22nd. And it says severe winter weather "held back activity" in several regions. Nine of the 12 Fed districts reported improved economic activity, but the Fed described growth as "modest." (Xinhua)

Atlanta Federal Reserve Bank President Dennis Lockhart described January US economic reports as "mixed" and stuck with his forecast for a modest recovery amid slowly repairing unemployment. "Upside surprises in inventories, capital spending, and consumption could tip the scales in favor of a stronger growth forecast," Lockhart added. (Xinhua)

The pace of US job cuts continued to slow last month, according to payroll report released by ADP. Automatic Data Processing (ADP), a payroll-processing firm, said private-sector employers cut 20,000 jobs in February (-60k in Jan), the fewest since February 2008 when employment first began to decline. This matched market estimates.

• It was the 11th straight month that job losses narrowed from the previous month. The service sector reported job growth for a third consecutive month after a 21-month decline, with an increase of 17,000 jobs in February, and the manufacturing sector moved into positive territory for the first time since January 2008 by adding a modest 3,000 jobs. (CNN Money)

The US Senate voted late Tuesday night to extend the deadline for unemployment benefits. Several hours later, President Obama signed the measure. More than 200,000 people were set to stop receiving checks this week after lawmakers let the Feb. 28 deadline to apply for extended federal benefits lapse. Senators had been trying to pass a 30-day, short-term extension for the past week. (CNN Money)

US companies are poised to increase investment in new equipment this year as profits recover, while keeping a tight rein on hiring, according to a quarterly survey of chief financial officers. Capital spending will rise 9% in 2010, the most in seven years, according to the average estimate of officers surveyed by Duke University/CFO Magazine. Earnings will rise as much as 14% and payrolls will climb 0.2% over the next 12 months, the report showed. (Bloomberg)

The Asian Development Bank (ADB) plans to revise upward its 2010 economic growth forecast for developing Asia to around 7.0% (vs. 6.6% forecast in Dec 09). citing the ability of some nations to quickly employ massive stimulus measures, ADB’s president Haruhiko Kuroda said. “The rapid use of monetary and fiscal stimulus measures in developing Asia has led the signs of a “V-shaped recovery”. This year and next year it will grow rapidly. However, the challenge will be to sustain that pace of recovery, and rolling back stimulus measures at the same time remains a difficult balancing act,” he added. (Financial Daily)

Greece’s government passed measures to cut spending by an additional €2.4bn and raise an extra €2.4bn in revenue, Deputy Citizen Protection Minister Spyros Vougias said. The Cabinet also decided to cut civil servants’ bonus-salary payments by 30.0%, to freeze pensions and to raise the main value-added tax to 21.0% from 19.0%. (Bloomberg)

The European Commission said it is working on “instruments” to aid financially distressed governments in the euro area that it will keep secret for now to avoid inciting speculators to prey on Greece. “We have to have solidarity in the European Union. The concrete instruments, we will present them in due time. I should not feed this kind of speculation at this moment,” President Jose Barroso said. (Bloomberg)

Europe’s Purchasing Managers’ Index for service and manufacturing industries remained at 53.7 in February, marking the seventh month of expansion as companies stepped up output to meet reviving global demand. That’s in line with an initial estimate published on 19 Feb. (Bloomberg)

European retail sales declined 0.3% mom in January (+0.5% in Dec 09) as companies across the region continued to trim jobs and reduce costs to help shore up earnings. That’s in line with economists’ median forecast. From the year-earlier month, sales declined 1.3% in January (0.5% in Dec 09). (Bloomberg)

Australia’s economy grew 0.9% qoq in 4Q09 (0.3% in 3Q09), marking the fastest pace in almost two years, and underscoring the central bank’s decision to boost borrowing costs for the fourth time in five meetings. The gain in GDP matched market forecasts. From a year earlier, gross domestic product (GDP) expanded 2.7% in 4Q09 (0.9% in 3Q09). (Bloomberg)

South Korea’s factory output was better than economists expected in January, as a rise in production of semiconductors and mobile phones offset a decline in consumer and corporate spending. Industrial production remained unchanged from Dec 09, when it gained a revised 2.4% mom. Economists forecast for a 0.6% mom drop. From a year earlier, output increased 36.9% in January (34.3% in Dec 09). (Bloomberg)

The Indonesian parliament voted to seek a police investigation against Vice President Boediono and Finance Minister Sri Mulyani Indrawati over their roles in the 2008 bailout of PT Bank Century. (Bloomberg)