The U.S. economy is expected to grow more strongly in 2026 than a year earlier, but job growth remains sluggish, according to the NABE year-end survey. Economists forecast growth to pick up to 2%, supported by higher consumer spending and business investment.
However, the Trump administration’s new import tariffs are expected to be a major drag, with nearly all respondents considering them the biggest downside risk to the economic outlook. Tighter immigration enforcement is also expected to weigh on economic activity, while higher productivity is a potential growth driver.
Inflation is expected to close at 2.9% this year before easing to 2.6% in 2026, with tariffs contributing most of the price pressure. Economists see inflation remaining stubborn despite moderate growth, leaving the prospect of price shocks relevant.
The labor market is expected to continue to lose momentum, with job gains of around 64,000 per month, a modest pace compared to historical trends. The unemployment rate is expected to rise to 4.5% in early 2026 and remain stable through the end of the year.
With inflation struggling to come down and unemployment rising only slightly, the Fed is expected to approve a small rate cut in December and is seen slowing its easing pace in 2026. Economists predict just a half-point additional cut next year, approaching the neutral rate of monetary policy.
