FORECASTS: Historical precedent and economists' guesswork are coming into alignment in the United States to declare the bad times for the US economy are all but over.

More than 90 out of 100 top economists employed by major manufacturers, banks and investment companies believe the recession will end sometime before the end of March, according to Blue Chip Economic Indicators, a monthly newsletter that tracks the world's biggest economy.

"Fresh evidence has emerged that suggests a bottoming in US economic activity is well advanced and that a recovery will take hold relatively soon, barring some new shock," it declares, citing gains in consumer confidence and a fall in job losses during December.

Among the Blue Chip economists, 7 per cent said a recovery had already begun, 22 per cent said it would happen this month, 26 per cent opted for February, and 37 per cent predicted recovery would take hold in March.

The economists took heart from the fact that worker hours and overtime were increasing, a sign common to downturns when production is increasing and companies are about to start hiring again.

Consistent with a recent survey of 55 analysts in the Wall Street Journal, the Blue Chip forecasters said recovery would be steady but unspectacular.

They projected gross domestic product (GDP) of 0.7 per cent in the first quarter, rising to 2.6 per cent in the second quarter, 3.6 per cent in the third and 3.8 per cent in the fourth. GDP in the US fell 1.3 per cent in the third quarter of 2001 and is expected to record a further contraction of 1.0 per cent for the fourth quarter.

Historical trends also point to a good year for the markets. When the averages go up in the first five trading days of the new year, it indicates that the bulls will have the run of Wall Street for the year, according to Technical Trends newsletter.

All the indices have risen in the first week of trading. The Dow Jones Industrial Average rose 1.3 per cent in the first five days, the Standard & Poor's 500 stock index went up 1.1 per cent and the Nasdaq Composite index increased 5.4 per cent. Since 1972 there have been 16 years when all three indices rose in the first five days. Of these, 10 ended with all averages up for the year, four with at least one ahead and one year, 1973, with all three down.