A new era of “slow job growth” is dawning on the global economy, directly attributable to the persistent grip of the trade war, warns the Organization for Economic Co-operation and Development (OECD). The OECD has significantly lowered its global economic growth projections, now anticipating a decline from 3.3% in 2024 to 2.9% in both 2025 and 2026, with direct implications for employment worldwide.
The OECD’s latest outlook report states unequivocally that “weakened economic prospects will be felt around the world, with almost no exception.” It explicitly predicts that “lower growth and less trade will hit incomes and slow job growth,” highlighting the pervasive impact on labor markets. The United States, Canada, Mexico, and China are specifically identified as major contributors to this anticipated global economic decline, signaling job market struggles in key economies.
Further complicating the picture, the OECD warns that “protectionism” will put pressure on inflation, meaning costs for goods and services will rise. This inflationary trend could lead to reduced consumer spending and business investment, further impacting job creation. The report also highlights the added risk for developing nations if governments are deep in debt, as this could limit their ability to stimulate employment.
In response to these challenges, the OECD advises central banks to “remain vigilant” regarding inflation, even if immediate interest rate hikes are not expected. More broadly, the report emphasizes the critical role of increased investment in stimulating business development and improving public finances, a crucial step for fostering job creation in a constrained global economy.