A prominent economic organization is projecting steady but modest global economic growth this year and next as private-sector business confidence improves even while housing and credit markets still feel the pinch of monetary tightening.

The Organization for Economic Co-operation and Development, based in Paris, said its forecast calls for gross domestic product in the United States to grow at an annual rate of 2.6% in 2024, before slowing to 1.8% in 2025, “as the economy adapts to high borrowing costs and moderating domestic demand,” the group said in a statement.

Global growth in GDP is expected to reach 3.1% in 2024, matching the 2023 performance, before rising to 3.2% growth in 2025. “The global economy has proved resilient, inflation has declined within sight of central bank targets, and risks to the outlook are becoming more balanced,” OECD Secretary-General Mathias Cormann said in the statement. “We expect steady global growth for 2024 and 2025, though growth is projected to remain below its longer-run average.”

The group cautioned significant uncertainty remains, especially if inflation stays higher for longer to result in slower-than-expected reductions in interest rates and further financial vulnerabilities for businesses and consumers.

“High geopolitical tensions remain a significant near-term risk to activity and inflation, particularly if the evolving conflict in the Middle East and attacks in the Red Sea were to widen or escalate,” the report said. “On the upside, demand growth could prove stronger than expected, if households and firms were to draw more fully on the savings accumulated during COVID-19.”

U.S. GDP grew at an annual rate of 1.6% in this year’s first quarter, according to the Department of Commerce. For 2024 and 2025, the OECD puts the United States near the middle among the world’s largest economies for expected GDP growth — higher than countries including Canada and the United Kingdom, but lower than those such as India, Indonesia and China.

U.S. job creation remains strong by historical standards, but the Conference Board said recent monthly drops in a key employment metric point to potential stalling of that growth in the second half of 2024.

The economic research group, based in New York, said its Employment Trends Index decreased in April to 111.25 from 112.16 in March. The group conducts monthly surveys of employers based on several metrics, and a decrease in the index signals a slowdown in hiring ahead while increases signal increased hiring.

“The ETI has been on a downward trajectory since its peak in March 2022, and this month signals a continuation of that trend,” Will Baltrus, associate economist at the Conference Board, said in a statement. “However, the index remains historically elevated and is still above its prepandemic level, which suggests aggregate job losses are less likely than a slowdown in employment growth.”

The latest Department of Labor numbers showed the U.S. adding 175,000 jobs in April, marking the 39th consecutive month of growth. “However, between the decrease in the topline number and the narrowing of job gains across sectors relative to recent months, the labor market is beginning to show signs of cooling following a period of very strong growth since the pandemic recession,” Baltrus said.