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WASHINGTON Reuters The patient clearly looks ill, but is there at least a steady pulse?

August U.S. payrolls and other data this week will provide critical evidence on whether the U.S. economy is slipping into a coma of barely perceptible growth, as some economists fear.

"Our view is that the recovery is petering out, not sliding into a double dip," said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina. "In our mind, the employment situation likely deteriorated in August."

After a recent bump up in jobless benefits claims, weak housing data and the Federal Reserve pledging to step up asset purchases if necessary, the headline numbers in Fridays payrolls are likely to add to a gloomy prognosis.

Economists polled by Reuters forecast an August drop of 99,000 non-farm jobs after a fall of 131,000 in July. The unemployment rate is expected to tick higher, to 9.6 percent from 9.5 percent.

The main culprit for the drop is the continued layoff of temporary government census workers. But if private-sector employment maintained growth and both working hours and hourly income also made gains, there would be reason for optimism that consumers have some capacity to spend money.

"If companies are asking workers to put in more hours, that is a good sign that they will have to start hiring soon," said Bernard Baumohl, head of The Economic Outlook Group in Princeton Junction, New Jersey.

The Reuters poll forecasts a 0.1 percent gain in average earnings and a slight gain in weekly hours. Private payrolls are expected to rise by 42,000 after a 71,000 rise in July.

There are wide variations in the data. Vitner predicts a fall of 20,000 private-sector jobs in August, while Baumohl argues that fundamentals are better with an 80,000 rise. But even in the latter case, the growth will still likely be too weak to overcome gloom in markets and among business leaders.

INDUSTRIAL DEMAND

Institute for Supply Management data on Wednesday will also show whether the slowdown has spread to the manufacturing sector. A key metric will be whether the new orders index falls below 50 in August after a drop in durable goods orders in July.

Many economists have been hoping that the factory sector would provide enough lift to offset the weak consumer and housing sectors.

But U.S. economic growth in the second quarter was marked down to 1.6 percent on Friday, prompting economists to ratchet back forecasts to around 1.7 percent for third quarter growth from 2.4 percent just two weeks ago.

Societe Generale credit analyst Aneta Markowska said too much of U.S. consumer demand was flowing to overseas producers to create sustainable job growth at home.

"The hope was that the inventory cycle would induce enough manufacturing job growth to jump-start private demand and grease the wheels of the recovery cycle, but that process has failed to catch on," she wrote in a research report.

Auto sales data on Wednesday will provide another measure of consumer demand. Analysts are forecasting a rate roughly flat with Julys, at 11.5 million units -- well below the year-ago rate, which was fueled by "cash for clunkers" tax credits. Forecasts for the second half and next year may be cut.

CENTRAL BANK MONEY FLOOD

The data should help the Federal Reserve decide whether to increase its quantitative easing program, under which it is reinvesting the proceeds from maturing mortgage debt into longer-term Treasury debt in an effort to push borrowing rates down further.

At the central bankers conference in Jackson Hole, Wyoming, Fed Chairman Ben Bernanke pledged that the Fed would increase asset purchases if needed, but he declined to say what would trigger bolder action.

Also on Wednesday, the Fed will release minutes of its August policy meeting, which may shed light on the central banks options to increase quantitative easing and on the divisions it has caused between policymakers.

The European Central Bank also meets next week and is likely to extend its unlimited liquidity provisions, which had been due to start expiring in September. It aims to keep flooding money markets with cash to ease financial troubles in southern Europe.

Meanwhile, the ECB is likely to upgrade forecasts for overall European growth on a faster-than expected German recovery that is causing industrial workers there to demand higher wages

Axel Weber, an ECB governing council member who also heads Germanys Bundesbank, told CNBC in Jackson Hole that Europe was on the brink of a "self-sustaining recovery." Germanys unemployment rate will be around 7 percent and will continue to fall, he said.

Japans central bank also will be in focus next week over the possibility of unilateral intervention to curb the yens rise.

Prime Minister Naoto Kan, who promised "firm measures" on currencies if needed, plans to outline new measures to support the economy and deal with the yen on August 31. First, he will confer with Bank of Japan Governor Masaaki Shirakawa, who attended the central bankers conference in Jackson Hole.

A "jawbone" campaign by Japanese officials raising the specter of intervention over the past week has pulled the yen back from a 15-year high of 83.57 against the dollar. A continued rise threatens to derail an export-led recovery for Japan.

Reporting by David Lawder; Editing by Dan Grebler

PHILADELPHIA Reuters Frances Sanofi-Aventis on Sunday publicly disclosed its $18.5 billion, $69-per-share cash offer for Genzyme Corp after failing to engage the biotechnology company in merger talks.

Sanofi said it would consider all options to complete the transaction, hinting it would consider a hostile takeover bid.

The move to publicly disclose the offer puts pressure on Genzyme to respond to the offer or justify to shareholders why it has not held negotiations.

"Sanofi-Aventis is disclosing the contents of its letter in order to inform Genzymes shareholders of the significant shareholder value and compelling strategic fit inherent in a combination of the two companies," Sanofi said in a statement.

Sanofi confirmed it made the offer privately to Genzyme about a month ago and that the lack of talks left it "little choice" but to make its offer public.

Genzyme was not immediately available to comment.

Sources previously told Reuters that Genzyme wants an offer of at least $75 per share before Sanofi could review its private financial records. Some shareholders want as much as $80 a share to clinch a deal.

Analysts have said they expect a deal to be finalized in the range of $74 to $77 a share.

JACKSON HOLE, Wyoming Reuters Federal Reserve Chairman Ben Bernanke has smoothed the ruffled feathers of anti-inflation hawks at the Fed by indicating he will only press for more policy easing if the U.S. economic slowdown worsens.

Getting that buy-in may eventually make it easier for Bernanke to rally the Fed to move more aggressively if it is clear that the recovery is stalling.

"The data is likely to do the work convincing more timid members" of the Feds policy-setting committee, BNP Paribas economist Julia Coronado wrote in a note to clients.

Speaking on Friday at the Feds annual conference in this mountain resort, Bernanke gave a detailed reading of the wilting economic outlook and a reminder of the weapons the Fed could use to bolster the recovery from the worst U.S. recession since World War Two.

It was a much more nuanced assessment than the statement released by the U.S. central bank on August 10 when it shifted policy by taking new measures to support the economy.

The Feds move nearly three weeks ago to resume buying longer-term Treasury securities to hold its balance sheet steady, instead of allowing them to continue running off, was a controversial one within the banks inner sanctum.

Some members of the policy-setting Federal Open Market Committee saw the change as sending a signal to markets that the Fed was closer to major new monetary easing than it was.

Some Fed officials question whether recent weakness in the U.S. economy is not merely a soft patch in a recovery that will eventually gather momentum rather than an early warning sign that growth will be too sluggish to support new job creation.

Critics of the move on the Feds policy-setting panel are wary of further bloating a balance sheet that at $2.3 trillion is more than twice its pre-crisis levels, just to bring down unemployment by an incremental amount.

To the critics, the Fed sent a wrong signal on August 10 when it said it would resume buying Treasury bonds "to support the recovery."

Bernankes speech has given some solace to the skeptics.

While acknowledging the slowdown, Bernanke said the preconditions for a pickup in growth in 2011 appear to remain in place.

"The chairman did not brace the nation for a double-dip" recession, said Credit Suisse economist Dana Saporta.

Bernanke was also at pains to weigh the risks and benefits of any new Fed action, acknowledging that the exact impact of buying more Treasury debt is unknown, just as cutting the already minimal interest rate the Fed pays banks to park their cash at the central bank might help only a little.

"We took Bernankes comments as consistent with our own view that there is a higher bar for further stimulus than seemed the case following the decision to maintain the size of the balance sheet at the August FOMC meeting," Barclays Capital economist Peter Newland said.

In addition, Bernanke spelled out that one of the factors that would guide the Fed would be a further fall in already low levels of inflation, raising the risk of deflation.

"It is worthwhile to note that, if deflation risks were to increase, the benefit-cost trade-offs of some of our policy tools could become significantly more favorable," he said.

To some economists, however, the pace of the U.S. recovery has already slipped into a lower gear, and Bernankes speech portends further Fed action in the next few months.

"The overall tone was one of watch and wait, despite ongoing signs that U.S. economic activity has not only dropped below its potential growth rate but has a significant probability of weakening further," Goldman Sachs economist Jan Hatzius wrote in a research note.

By framing the conditions for any new move to head off the risk of a relapse into recession, Bernanke has likely made it easier to bring the full Fed along with him.