By Evelina M. Tainer, Chief Economist, Econoday
3/8/02

In a repeat performance Fed chairman Alan Greenspan testified on monetary policy again this week, not only reiterating his cautiously upbeat tone from a week ago but also indicating that the "recovery was underway". While Greenspan's remarks still indicated that the U.S. was facing a slow recovery, he was somewhat more optimistic than the previous week given that a few more positive indicators had been reported in the interim. Greenspan's remarks were not viewed altogether in a friendly light by either equity or bond investors.

The employment situation for February surprised economists and market players by showing more employment growth as well as another drop in the jobless rate. Labor Department officials went out of their way to note that special factors caused the better-than-expected figures. Nonetheless, bond investors were rattled and bond yields jumped yet again. Equity investors were more pleased with the data since it pointed to improved economic growth.