The OECD has downgraded its forecast for economic growth in 2008, but that didn't stop European indexes from rising on Wednesday morning or U.S. stock index futures from pointing to modest gains. In Europe, the U.K.'s FTSE 100 rose 0.5 per cent and Germany's DAX index rose 1.3 per cent. In Asia, Japan's Nikkei 225 fell 0.2 per cent.
Futures for the Dow Jones industrial average point to a 27 point increase, to 12,249. Futures for the broader S&P 500 point to a 3.5 point increase, to 1330.5.
In the United States, the Labor Department reported that productivity rose 1.9 per cent in the fourth quarter, following a 6.3 per cent gain the previous quarter - a sign that U.S. companies are adapting to weaker economic conditions.
As well, the ADP National Employment Report showed that private employment numbers fell by 23,000 between January and February, below the consensus expectation and the first drop since 2003. According to ADP, it signals another deceleration in employment growth.
"The bad news is that ADP is the single best advance indicator of the official payroll numbers," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to clients. "But the good news is that it is often wrong, so the drop reported today does not guarantee a decline in the official data on Friday."
Meanwhile, the OECD ratcheted down its growth forecast for the 30-country organization to less than 2 per cent for 2008, noting that it will be a difficult year for growth and could yield some unpleasant surprises. This is a notable change for the OECD, which had previously forecasted that its member countries would perform fine even as the U.S. economy deteriorated.
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