U.S. economic growth is expected to edge higher in 2026, while inflation remains persistent and job gains stay modest, according to a new year-end forecast from the National Association for Business Economics (NABE).
The survey, conducted from November 3 to 11 among 42 professional forecasters, shows a median growth expectation of 2% for next year. That is slightly above the 1.8% forecast in October and well above the 1.3% projection issued in June.
Economists cite stronger personal spending and increased business investment as primary drivers of the expected growth. However, the panel also anticipates that the Trump administration’s newly implemented import taxes will subtract at least a quarter of a percentage point from overall economic performance.
Downside risks
Survey respondents identified “tariff impacts” as the most significant downside risk to the economic outlook, both in terms of likelihood and potential scale. Tougher immigration enforcement was also highlighted as a factor expected to dampen growth.
On the upside, stronger productivity gains were viewed as the most likely factor to push growth above baseline expectations.
Inflation and job market
Economists expect inflation to finish the year at 2.9%, slightly below the 3% forecast in October. Inflation is projected to ease only marginally to 2.6% next year. According to the survey, tariffs are expected to account for between a quarter and three-quarters of a percentage point of next year’s inflation rate.
Regarding the job market, job growth is projected to remain modest at around 64,000 new jobs per month, while unemployment is expected to rise to 4.5% early next year and hold at that level.
Federal Reserve policy expectations
With inflation proving sticky and labor market cooling only gradually, economists anticipate a quarter-point rate cut in December. Beyond that, they expect a slower pace of easing next year, with the Fed cutting rates by only about another half-point as policy approaches neutral.
Source: Reuters
