Economists see slightly faster US growth, sticky inflation in 2026

U. S. economic growth will increase slightly next year but employment gains will remain sluggish and the Federal Reserve will slow any further rate cuts, economists polled by the National Association for Business Economics said in the group’s year-end forecast survey.

Professional Forecasters

The survey of 42 professional forecasters, conducted from November 3 to 11, found the median outlook was for growth of 2%, up from 1.8% in a prior October survey and in contrast to a growth rate of only 1.3% projected in June.

Increased personal spending and business investment are seen driving growth higher, offset by what the panel in a near consensus said would be a drag on growth of a quarter of a percentage point or more from the Trump administration’s new import taxes.

Tariff Impacts

“Respondents cite ‘tariff impacts’ as the greatest downside risk to the U.S. economic outlook, considering both probability of occurrence and potential impact,” the survey reported.

Tougher immigration enforcement was also seen as depressing growth, with stronger productivity seen as the most likely factor to drive growth higher than expected.

Inflation

Inflation is expected to end the year at 2.9%, slightly below the 3% predicted in the October survey, and fall only slightly to 2.6% next year, with tariffs seen responsible for anywhere from a quarter of a percentage point to nearly three-quarters of a percentage point of that.

About E. J. McKay

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