IMF: Worst over for U.S. but recovery to be slow

The sharp fall in U.S. economic output "seems to be ending" but a recovery is likely to be slow and gradual due to uncertainty over weak jobs and housing markets, the International Monetary Fund said on Friday.

The IMF board said U.S. policymakers need to complete the task of stabilization, develop exit strategies from stimulus programs, strengthen financial regulation and cut budget deficits in the medium term.

"As a result of their increasingly strong and comprehensive policy measures, the sharp fall in economic output seems to be ending and confidence in financial stability has strengthened," the IMF said in a report from its annual consultation with U.S. officials and institutions. "Nevertheless, with financial strains still elevated, the recovery is likely to be gradual, and risks are tilted to the downside."