The US economy is expected to grow stronger in 2026 compared to the previous year, although job growth remains slow, according to the year-end NABE survey. Economists forecast growth to increase to 2%, supported by higher consumer spending and business investment.
Nevertheless, the new import tariffs imposed by the Trump administration are expected to be a major obstacle, with nearly all respondents considering them the biggest downside risk to the economic outlook. Stricter immigration enforcement is also expected to weigh on economic activity, while higher productivity is seen as a potential factor to boost growth.
Inflation is expected to close at 2.9% this year before slowing to 2.6% in 2026, with tariffs contributing a large part of the price pressures. Economists view inflation as stubborn despite moderate growth, keeping the prospect of price shocks relevant.
The labor market is expected to continue losing momentum, with job additions around 64,000 per month, which is moderate compared to historical trends. The unemployment rate is forecast to rise to 4.5% in early 2026 and remain stable through the end of the year.
With inflation difficult to reduce and unemployment rising only slightly, the Fed is expected to approve a small rate cut in December and is seen slowing the pace of easing in 2026. Economists predict only an additional half-point cut next year, approaching a neutral monetary policy rate.
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