Greenspan, who last said the country's first recession in a decade had ended, told a bankers' group that he believed there has been more "encouraging signs" of strength in recent days.
But as he did in his congressional testimony, Greenspan said the rebound was likely to be modest, at least in the early going, because there is little pent-up consumer demand, given that Americans spent strongly last year on autos and new homes.
Analysts said Greenspan's latest remarks supported their view that the central bank will not feel pressure in coming months to start raising interest rates to prevent higher inflation.
Adding to the optimism about the economy, the National Bureau of Economic Research, which has the job of officially declaring the beginning and end of recessions, posted a memo on its Web site this week noting the favorable increase in employment in February that the government reported on Friday.
"Payroll employment increased slightly in February, the first increase in seven months," the NBER said. "Other signs indicate that the decline in activity that began last year may be coming to an end."
The NBER, composed of academic economists, announced in November that the country had entered a recession in March 2001, ending a record 10-year economic expansion.
The new memo said that "at some future date" the six academic economists who make up the NBER's business cycle dating committee would declare an ending date for the downturn.
But the memo cautioned that this call could be months away, noting that the NBER did not declare the 1990-91 recession at an end until December 1992, 21 months after the March 1991 date it selected as the month the downturn ended.
In his speech delivered by satellite to a Honolulu meeting of the Independent Community Bankers of America, Greenspan repeated some of the optimistic views he has made in congressional testimony in recent weeks.
"We have seen increasing signs that some of the forces restraining the economy over the past year are starting to diminish and that activity is beginning to firm," he said.
Last week, Greenspan was even more direct, saying, "The recent evidence increasingly suggests that an economic expansion is already under way."
In his appearance Wednesday, Greenspan noted the favorable unemployment report that came out on Friday, showing that businesses added 66,000 workers to their payrolls, the first increase in seven months.
"In recent days, encouraging signs of strengthening underlying trends in final demand have emerged, although the dimensions of the pickup remain uncertain," Greenspan said.
He also said he believes that one of the key weaknesses that triggered the recession, a drop in business investment - especially in high-tech areas, would soon turn around.
"If the recent more favorable economic developments gather momentum, uncertainties will diminish, risk premiums will fall and the pace of capital investment embodying new technologies will increase," Greenspan said.
http://accesswdun.com/article/2002/3/197486