Nouriel Roubini, RGE Global Monitor Chairman, attends a luncheon in New York July 15, 2009.

The worst US recession in at least five decades may be over at year’s end, said Nouriel Roubini, the New York University economist who predicted the financial crisis.

In a statement Roubini issued later in the day, he said his comments on the recession ending by year-end were consistent with views he “expressed previously” and that he continues to see a “shallow, below-par and below-trend recovery.”

In a June speech, the economist predicted slumps in the US and other advanced economies would last another six to nine months, and he called signs of recovery “more yellow weeds than green shoots.”

“We should continue with fiscal stimulus and we might need a second one,” Roubini, 51, said Friday. There’s still a “meaningful amount of weakness” in labor markets, industrial production and housing, he said.

A second stimulus package of as much as $250 billion may be needed sometime early next year, particularly if unemployment goes “well above 10 percent by the end of the year,” he said.

Fed minutes

Federal Reserve policy makers projected the US unemployment rate may climb as high as 10 percent, from 9.5 percent in June, and judged the economy vulnerable to further shocks, according to minutes of their June 23-24 meeting released Thursday.

Economic growth will average 1.5 percent in the July-to-December period, according to a Bloomberg News survey of economists this month.

Signs of stabilization in the housing market, improving consumer confidence and smaller declines in auto sales are reinforcing forecasts for gains in consumer spending.

Employers in the US cut 467,000 jobs in June, pushing the unemployment rate to the highest in almost 26 years, the Labor Department reported on July 2. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent in June, the lowest level since records began in 1967.

China, India

The recession started in December 2007, according to the National Bureau of Economic Research’s Business Cycle Dating Committee. While there are

signs of stabilization, it’s “way too early” to be considering any declaration for an ending date, committee head Robert Hall said last month.

Nobel Prize-winning economist Paul Krugman last month said the US may emerge from its downturn by September.

Major emerging powers such as China, India and Brazil are among nations that may recover fastest once the global economy picks up, Roubini told reporters at the conference.

He also mentioned Chile, Uruguay, Colombia and Peru as countries better-positioned to grow.

Countries facing the biggest challenges include emerging markets in Eastern Europe, such as Hungary, Bulgaria and Ukraine, he said.

Source: Bloomberg