Recession over, but unemployment will continue to rise: OECD

Group urges Bank of Canada to keep lending rate near zero until June 2010

While Canada's economy is beginning to recover, with the recession ending in late summer, unemployment will continue to rise well into next year, according to the OECD.

Renewed private investment in machinery, equipment and housing, as well as government infrastructure projects, have helped Canada turn the corner, said he Paris-based Organization for Economic Co-operation and Development in its latest Economic Outlook.

In fact, the worst of the downturn is over the 30 member states of the OECD, stated the report.

However, the recovery is slow and "feeble," so unemployment will continue to climb throughout 2010, said the group.

The Bank of Canada should keep its benchmark lending rate near zero until at least June 2010, according to the OECD.

Instead of focusing on measures such as extending the window of eligibility for employment insurance, the federal government should focus on post-recovery issues such as the growing national debt, said the group.

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