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                      DECPG Daily
        Economics and Financial Market Commentary
                      March 4, 2011
 Mick Riordan (x31289), Cristina Savescu (x80812), Nadia Islam Spivak (x80504)
   Eung Ju Kim (x85804), Shane Streifel (x33867), Annette De Kleine (x34710)
  You’ll find recent issues of this Daily and lots of other current analysis and high-frequency data at our
              intranet website: http://gem or for external users http://www.worldbank.org/gem.

Oil prices continue to climb amid escalating Libya conflicts and expectation of
strong demand. Oil prices remained firm on Friday, heading for the sixth weekly gain in
London, as persisting unrest in Libya fueled worries about prolonged supply disruptions
while robust U.S employment numbers in February suggested signs of growing
demand. Brent crude for April delivery rose as much as $1.51 to $116.30 a barrel,
posting 3.2% gain thus far this week, while Crude for April settlement in New York rose
$1.18 to $103.09 a barrel, settling for a 5.3% gain this week. Oil prices declined
yesterday amid talk of peaceful negotiation to end Libya civil conflicts.

US unemployment rate falls below 9%. In signs of a self sustained improvement to
the US labor market, the US Labor Department reported that the number of new
payrolls added in February increased by 192,000. This was driven by a 222,000
addition from private sector employers and a loss of 30,000 from state and local
government employees. In the private sector, significant increases were recorded in the
services (120,000), manufacturing (33,000) as well as the battered construction sector
(33,000). Overall the average increase in payrolls for the first two months of 2011 has
been 145,000, up from the average of 120,000 recorded for the first half of 2010. As a
consequence, the unemployment rate dipped to 8.9% in February, the lowest level
since April 2009 [see Chart at http://gem or http://www.worldbank.org/gem]. The higher
job creation levels should provide further impetus to private household spending, which
accounts for some 70% of US GDP, thus supporting the recovery.

In spite of the positive developments on the employment front in February, there still
remain some 13.67 million unemployed people in the US. In his testimony before the
Senate Banking Committee earlier this week, Mr. Benanke noted that “we do see some
grounds for optimism about the job market over the next few quarters, including notable
declines in the unemployment rate in December and January, a drop in new claims for
unemployment insurance, and an improvement in firms' hiring plans. Even so, if the rate
of economic growth remains moderate, as projected, it could be several years before
the unemployment rate has returned to a more normal level. Indeed, FOMC participants
generally see the unemployment rate still in the range of 7-1/2 to 8 percent at the end of
2012�.




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Among emerging markets...In East Asia and Pacific, Indonesia's central bank kept its
benchmark overnight interest rate at 6.75 percent at the latest monetary policy
committee meeting, in line with median forecasts, and announced plans to adjust the
rate in stages while monitoring increases in core domestic inflation. This increase
follows a similar 25 basis points hike in February, the first interest rate increase in two
years.


Recent issues and other current analysis are also available on the Prospects blog.


*****************************************************
The Daily Brief is a summary of economic news items for Bank staff whose responsibilities require that
they stay abreast of changes in global markets. The views expressed here are those of the various
authors and do not necessarily reflect those of the World Bank Group's Executive Directors or the
countries they represent. The content is subject to copyright and is not for quotation outside of the World
Bank. The Prospects Group of the World Bank is pleased to share this content with GEM subscribers,
under the terms and conditions of use agreed upon login (at www.worldbank.org/gem) to the extranet
GEM site. Feedback and requests to be added to or dropped from the distribution list, may be sent to
eriordan@worldbank.org




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