U.S. recession to bottom out this year: OECD

WASHINGTON (Reuters) – A severe U.S. recession will bottom out this year, but any recovery will be weak due to anemic markets and shrunken consumer wealth, the Organization for Economic Cooperation and Development said on Wednesday.

"In this environment, a considerable degree of economic slack, especially in the labor market, is likely to persist ... bringing inflation to very low rates," the Paris-based OECD said in a twice-yearly report on global economic conditions.

It estimated that U.S. national output will contract 2.8 percent in 2009 but grow 0.9 percent in 2010.

The OECD urged the Obama administration to push ahead with plans for public-private partnerships to remove toxic assets from banks' balance sheets, adding that, if necessary, the Federal Reserve should expand the scale of its quantitative easing measures that include buying longer-term U.S. Treasury securities.