A generation of young Americans face a bleak future of unemployment but the US economy will avoid a double-dip recession, according to the Organisation for Economic Cooperation and Development (OECD).
The Paris-based organisation yesterday said it could be 2013 before employment returns to pre-recession levels after peaking at 10 per cent of the labour force in 2009.
However, OECD secretary general Angel Gurria said: “We don’t see a risk of a double-dip recession. That said, we don’t see either a recovery that is strong enough to put a significant dent in unemployment.”
The OECD report projects US economic growth at a sluggish 2.6 per cent in 2010.
It added that because of the degree of slack in the economy and low inflation, current low interest rates were appropriate. But it urged policymakers to continue planning for a quick withdrawal of “the very accommodative stance of monetary policy” as soon as conditions permit in order to avoid spiralling inflation.
An announcement by the National Bureau of Economic Research (NBER) yesterday backed up the findings. The organisation said the US economy officially exited recession in June 2009, making it the longest downturn since the Great Depression.
However, while the committee said the economy has not returned to operating at normal
capacity, it effectively ruled out the possibility of a double dip recession.
A spokesman said: “Any future downturn of the economy would be a new recession and not a continuation of the 2007 recession.”