According to Federal Reserve chairman Alan Greenspan – seen by many as the most credible government official in the US – recent data suggests that “an expansion is well under way”.

Reporting to the Senate – his second appearance on Capitol Hill within a week – Greenspan noted there were “tentative indications that the contraction phase of this business cycle has drawn to a close”; an observation that led some observers to believe he is paving the way to a rise in US interest rates later this year.

Greenspan’s testimony was notably more bullish than that delivered last Wednesday to the House of Representatives. His racheting-up of optimism, opined analysts, mirrors the acceleration of the nation’s turnround.

Nonetheless, the Fed chairman continued to urge caution: the recovery, he warned, is likely to be more muted than previous upturns.

Greenspan’s positive attitude was supported by new figures released Thursday, furnishing further evidence of an improving economy. Non-farm productivity in the fourth quarter of 2001 increased at an annual rate of 5.2% - its greatest leap in eighteen months.

Data sourced from: The Times (London); additional content by WARC staff