Major central banks hold rates

By Nick Zieminski

NEW YORK (Reuters) - The European Central Bank kept euro zone interest rates on hold on Thursday amid some signs the global recession is tapering off, while U.S. jobless claims fell for a third week and worker productivity rose.

Although much of the economic news remains grim worldwide, there are some signs of improvement each day: In a rare piece of positive corporate news, United Airlines sought bids for a 150-jet order that would be its first in a decade.

The ECB slashed forecasts for the 16-country economy this year, however, and said growth would not return until mid-2010, while inflation would remain well below its 2 percent ceiling.

The Bank of England also left benchmark rates unchanged, as did the Bank of Canada.

The U.S. Federal Reserve, which like the central banks in Japan and Britain has cut rates below the ECB's 1.0 percent, is already looking ahead to the need to tighten monetary policy to control the impact of its recent massive stimulus.

Wall Street was boosted by energy shares and financials, with the S&P 500 index .SPX closing up 1.2 percent. But retailers fell, as deeper-than-expected May sales declines reflected consumer caution. <.

U.S. continuing jobless claims fell for the first time since early January in the most recent week and productivity rose, the Labour Department said.

Hopes the recession was easing lifted oil prices by $2.65 a barrel to $68.77, as Goldman Sachs forecast much higher prices, citing production cuts and a healthier economy.