A Double-Dip Isn’t in Cards, Agency Says : Economy: The Organization for Economic Cooperation and Development says the U.S. recovery will be slow.

The United States may suffer one of its slowest recoveries ever, but it should be able to avoid falling back into recession, the Organization for Economic Cooperation and Development said Monday.

The OECD, which acts as a “think tank” for major industrial nations, said lower interest rates and oil prices should lead to faster U.S. economic growth next year.

“We don’t think there will be a double-dip recession,” said an OECD official, who asked not to be identified. “But the recovery will be slow.”

After snapping out of recession in the second quarter following the Gulf War, the economy appears to have stagnated, setting off alarm bells on Wall Street and Capitol Hill about the recovery’s durability.

OECD officials admitted that they have had to revise downward their forecasts for U.S. growth the past few weeks, but they said they remain confident that a recovery is continuing.

The OECD now expects growth next year of about 2.5%, instead of the 3.1% it had forecast. That would make the rebound one of the slowest ever.

OECD officials said the economy should pick up steam as 1992 progresses. Growth in the fourth quarter of this year is expected to reach about 1.5%. It will pick up slightly to 2% in the first quarter of 1992, the officials added.

An OECD official said he could not rule out the possibility of the economy contracting in the fourth quarter. Even if that occurred, it would not mean that the country was falling back into recession, just bumping along the bottom, he said.

He voiced concern about American consumers’ lack of confidence, saying it could prove self-fulfilling if it persists and trigger a double-dip recession.

OECD officials said the economy has failed to pick up as originally forecast because it has taken longer than expected for lower interest rates to spur spending.

While the OECD believes that interest rates have been cut far enough, it said the Federal Reserve could cut rates further without risking inflation.

“We don’t think there’s any inflationary risk right now,” one official said. “If they (U.S. policy makers) want to take out insurance on the recovery, we would rather they . . . lower interest rates than break the budget agreement.”

But the OECD warned that the Fed will have to be ready to raise interest rates after the economy picks up steam. That is unlikely to happen until 1993, however.

While the OECD generally gave good marks to last year’s agreement to cut the budget deficit by nearly $500 billion over five years, it warned that it could be undermined.

“We remain concerned about the budget deficit,” an official said.