Merrill Lynch expected GDP in the US to decline 1 percent in the first quarter of next year before bouncing back to 3 percent growth in the second quarter.
By the second half, it expected US growth of 5 percent.
A more muted European recovery would begin at about the same as in the US, Steinberg said. Japan's recession, "mainly self-inflicted," would last until the end of the third quarter of next year, he said.
Manufacturers, who have lost 1.3 million jobs since the downturn began on the factory floor, took a more jaundiced view.
"We are likely at the bottom of the business cycle," National Association of Manufacturers president Jerry Jasinowski conceded in a report on next year's prospects.
"But the recovery in 2002 will be ugly and U-shaped, in my judgment, without significant growth in investment and exports."
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