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Economists Forecast Stronger US Growth, Lingering Inflation in 2026
A panel of 42 professional forecasters say stronger consumer spending and investment will lift 2026 output.
A plant employee works on the laundry production line at GE Appliances, in Louisville, Ky., on Aug. 8, 2025. Michael Hickey/Getty Images for GE Appliances
Tom Ozimek
Reporter
11/24/2025|Updated: 11/24/2025
The U.S. economy will grow faster next year than previously projected and inflationary pressures will tick down, but remain elevated, economists polled by the National Association for Business Economics (NABE) said in the group’s year-end forecast.
The NABE outlook survey, released on Nov. 24 and based on responses from 42 professional forecasters, shows economists marking up their expectations for gross domestic product (GDP) growth for 2026. The updated outlook is for the economy to grow 2 percent next year, up from 1.8 percent predicted in a prior October survey and significantly higher than the 1.3 percent growth rate projected in June.
Stronger consumer spending and a firmer investment backdrop are supporting the slightly brighter outlook, even as inflation is projected to remain sticky and the labor market is expected to soften.
“The November 2025 NABE Outlook Survey results point to a modestly stronger economic trajectory compared to that in the October 2025 survey,” NABE President Gregory Daco, chief economist at EY-Parthenon, said in a statement. “Inflation is expected to follow a slightly flatter path, with tariffs adding mild upward pressure.”
The panel now sees inflation ending 2025 at 2.9 percent, drifting only to 2.6 percent by the end of 2026—above the Federal Reserve’s 2 percent target. Tariffs were seen as contributing between a quarter of a percentage point to nearly three-quarters of a percentage point to the pace of inflation.
The NABE prediction for slightly faster economic growth dovetails with remarks made by Treasury Secretary Scott Bessent in a weekend interview with NBC’s “Meet the Press,” in which he said that he’s highly optimistic about the economy next year.
“I am very, very optimistic on 2026. We have set the table for a very strong non-inflationary growth economy,” Bessent said.
Bessent added that recent data showing flat imported-goods inflation undercut claims that tariffs are driving price increases, saying the latest inflation uptick is coming from services, not trade policy. He also cited a Council of Economic Advisers study that found inflation running about half a percentage point higher in blue states than in red states—something he attributed to heavier regulation and higher energy costs in those jurisdictions.
Labor Market Softening Ahead?
The NABE survey also suggests further labor market cooling. Job gains are projected to slow to about 23,000 per month by the end of 2025, while unemployment is expected to hover around 4.5 percent throughout 2026.
“The dispersion of job-growth forecasts is unusually wide, underscoring elevated uncertainty about labor demand,” NABE survey chair Yelena Maleyev of KPMG said in a statement.
Expectations for weaker hiring mirror concerns expressed by Federal Reserve officials, who during their most recent policy meeting in October worried about deteriorating labor market conditions and data showing that there was “little sign” that inflation was returning to the Fed’s 2 percent target sustainably.
“Available indicators were consistent with a continued gradual cooling in the labor market without any evidence of a sharp deterioration,” minutes from the October meeting indicate. “Consumer price inflation had moved up since earlier in the year and remained somewhat elevated.”
In a Nov. 17 speech, Federal Reserve Vice Chair Philip Jefferson described labor conditions are “mixed,” with unemployment claims moving sideways and companies reporting a blend of hiring delays and renewed investment.
“Information available in recent weeks appears to be consistent with a gradual cooling in both labor demand and labor supply,” he said. “I expect that the unemployment rate is likely to inch up slightly by the end of the year from the relatively low 4.3 percent rate recorded in August. While still solid, I continue to view the risk to my employment forecast as skewed to the downside. ”
Trump administration officials remain upbeat on the economy.
Bessent said during his interview on NBC that he sees no recession risk following the 43-day government shutdown and expects strong growth in 2026. He cited key provisions of the One Big Beautiful Bill Act—including eliminating taxes on tips, overtime, Social Security benefits, and car-loan interest on U.S.-made vehicles—as powerful tailwinds for working families. He also pointed to trade deals and new manufacturing investments, noting Boeing’s plan to expand its Dreamliner plant in South Carolina.
National Economic Council Director Kevin Hassett echoed the optimism, predicting 2026 will be a “blockbuster year,” though he warned of a “hiccup” in the fourth quarter of the year due to the shutdown.
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