Global recession ending:-OECD

*The global recession is coming to an end faster than thought a few months ago and may already be over, but recovery will rely on massive government spending and low interest rates for some time,the OECD said on Thursday.The Organization for Economic Co-operation and Development issued forecasts showing a broad return to economic expansion in the third quarter of 2009.It also said that while authorities needed to map out a strategy for withdrawal of fiscal and monetary stimulus once recovery was surer,now was no time to economies off life support.

The recovery might prove a little stronger than previously predicted, OECD chief economist Jorgen Elmeskov told Reuters in an interview where he elaborated on the forecasts for several key economies."Compared with expectations a few months ago, we now have a recovery which ... may be coming a little earlier and it may be slightly stronger because financial conditions have improved more rapidly than we assumed a few months ago," Elmeskov said.

The OECD forecasts show a third-quarter return to annualized quarter-on-quarter growth in the United States of 1.6 percent,1.1 percent in Japan,and 0.3 percent in the 16-country euro zone, led by its two largest economies,Germany and France.

The pickup that started with a "quite dramatic turnaround" in China,India and other Asian emerging market economies in the second quarter remained heavily dependent on government stimulus and ultra-low interest rates across the world, Elmeskov said.

TURNING POINT FOR G7:-While it predicted continued third-quarter contractions in Britain and Italy,and a rise followed by a fourth-quarter dip for Japan,the OECD said the broad picture for the G7 group of industrialized powers was better.

The forecasts, including information up to Sept 2, show the euro area turning positive in both of the last two quarters of 2009 after five straight quarters of contraction.Indeed,a monthly business survey on Thursday showed an index measuring activity in the euro zone manufacturing and services sectors combined now edging into expansion territory in August.

The OECD now expects 2 percent annualized growth in the euro zone in the fourth quarter, compared with its June prediction for a 0.5 percent contraction.On Thursday, the European Central Bank raised its staff projections for euro zone GDP this year and next, predicting growth in 2010 of between -0.5 percent and +0.9 percent.

The previous OECD growth forecasts for the United States had been zero and 0.5 percent for the third and fourth quarters -- now upped to 1.6 percent and 2.4 percent respectively.The OECD forecasts came on the eve of a meeting of finance ministers from the G20 group of developed and developing economies,at which they are likely to agree it is too soon to begin withdrawing stimulus measures.

Jobless rate at 9.7 percent;216,000 lost in August

*WASHINGTON-The unemployment rate rose to 9.7 percent in August, thehighest since June 1983,as employers eliminated a net total of 216,000 jobs.Analysts expect businesses will be reluctant to hire until they are convinced

The economy is on a firm path to recovery.Many private economists,and the Federal Reserve,expect the unemployment rate to top 10 percent by the end of this year.

While the jobless rate rose more than expected, the number of job cuts is less than July's upwardly revised total of 276,000 and the lowest in a year,according to Labor Department data released Friday. Economists expected the unemployment rate to rise to 9.5 percent from July's 9.4 percent and job reductions to total 225,000.If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the so-called underemployment rate reached 16.8 percent, the highest on records dating from 1994.The recession has eliminated a net total of 6.9 million jobs since it began in December 2007.There are now 14.9 million Americans unemployed.

:-Other economic data released this week has been positive. The Institute for Supply Management, a trade group, said Tuesday that the manufacturing sector grew in August for the first time in 19 months. On Thursday, the ISM said its service sector index rose to 48.4 last month, the highest level in nearly a year. Home sales, meanwhile, have increased for several months and prices are stabilizing.Some economists credit the Obama administration's $787 billion economic stimulus package of tax cuts and spending increases, along with the Cash for Clunkers program, with contributing to a recovery. But they worry about what will happen when the impact of the stimulus efforts fades next year.Vice President Joe Biden defended the stimulus package Thursday against Republican critics who say it is too costly."The recovery act has played a significant role in changing the trajectory of our economy,and changing the conversation in this country," Biden said. "Instead of talking about the beginning of a depression,we are talking about the end of a recession."Republicans criticized Biden's speech."The Democrats' rhetoric on their economic experiment doesn't match with the reality of millions of Americans remaining unemployed," said Republican Party chief Michael Steele. "The stimulus was an economic experiment that failed Americans."

Mission N-deal;Deal sails through IAEA,braces for some NSG rough weather

*As was expected after winning the trust vote the Congress-led UPA government would waste not a single minute to bring the nuclear deal on the track so as to run with full pace, a slew of diplomats has been sent in a jiffy to all the member nation having concerns with the deal around the world.The Prime Minister’s special envoy on nuclear matters, Shyam Saran, is in Ireland, which is considered by India as very difficult to be persuaded.

In a landmark step towards emerging out of its nuclear isolation, India scored a major diplomatic victory in Vienna with the IAEA Board of Governors today adopting the India-specific safeguards agreement by consensus.And in doing so, for the first time, the an international body, in this case the UN nuclear watchdog, has acknowledged India’s nuclear weapons programme. For the Indo-US nuclear deal, the bigger hurdle is up next — the Nuclear Suppliers Group which is likely to meet here on August 21.

With IAEA Director General Mohammed ElBaradei making a strong case for the India-specific safeguards agreement and Pakistan deciding against pressing for a vote, the coast was clear for New Delhi. Moreover, there was full endorsement from countries like UK, France, Finland, Russia, Germany, Brazil, South Africa, Australia, Canada, Algeria and Chile. Other countries like Ghana, Ecuador, Thailand, Morocco and Bolivia also supported the deal.

The nuclear deal now moves on to the 45-member NSG, which is going to be a major diplomatic challenge for both New Delhi and Washington. Going by some serious doubts raised by NSG countries in the IAEA Board today, the next three weeks will require an even stronger diplomatic push from both countries. Apart from China, which did not quite show a distinct change of heart today, countries like Austria, Switzerland, Ireland and Norway voiced serious concerns over the impact this would have on the NPT regime.
Ireland went to extent of saying that if the safeguards agreement had been put to vote today, it would have abstained. However, South Korea, an NSG member spoke with special permission and supported inclusion of India into the nuclear mainstream.

** What ails the India-US N-deal?
The clear demarcation of Indian nuclear reactors as either civilian or military threatens the nuclear deal signed between India and the US last July. Under that agreement, signed by US President George W Bush and Indian Prime Minister Manmohan Singh, the US would try and recognise India as a civilian nuclear power, and thus allow it nuclear technology and fuel denied under the sanctions which followed India's first nuclear test on May 18, 1974. This is subject to the United States Congress allowing the necessary changes in US law.

Indo-US nuclear tango
In return, India, would have to: i. identify and separate its civilian and military nuclear facilities and programmes; ii. declare its civilian facilities to the International Atomic Energy Agency (IAEA); iii.voluntarily place civilian facilities under IAEA safeguards; iv. sign an Additional Protocol for civilian facilities; v. continue its unilateral nuclear test moratorium; vi. work with the United States to conclude a Fissile Material Cut Off Treaty (FMCT); vii. refrain from transferring enrichment and reprocessing technologies to states that do not have them, as well as support international efforts to limit their spread; viii. secure its nuclear materials and technology through comprehensive export control legislation and through harmonisation and adherence to Missile Technology Control Regime (MTCR) and NSG guidelines.