Economic Forecasts for 2026: What's the Buzz?

The Uncertainty of Economic Forecasts

Economic predictions are often off the mark. Take 1929, for example. A well-known economist confidently declared that stock prices had hit a "permanent high." Just two weeks later, the market crashed, kicking off the Great Depression.

Fast forward to today, and economic forecasters still struggle. They often predict worse outcomes than what actually happens.

• Remember the pandemic recession? Many thought it would drag on, but it turned out to be the shortest recession in U. S. history.
• And let's not forget the constant warnings about an impending recession that never quite materialized.

Predictions for 2026

Despite these misses, it's still fun to see what the experts are saying about 2026. Most forecasters think the economy will keep chugging along, but growth might not be evenly spread.

• Richer folks and AI companies are expected to do well, while others might struggle.

Forecaster Perspectives

The Economist

• Predicts: "mediocre growth" for 2026
• Bumps Ahead: Trade wars and high deficits, but no major crash.

Goldman Sachs

• Predicts: U. S. GDP growth of 2.6%
• Reasons: Tax cuts and easier financial conditions will boost the economy.

Bank of America

• Optimistic about: AI investment.

J. P. Morgan

• Cautious: 35% chance of a recession due to trade wars, inflation, and a weakening labor market.

EY (Accounting Firm)

• Predicts: "K-shaped" growth will continue.
• Wealthy Americans and AI companies will keep spending.
• Lower-income families will face higher prices and slower wage growth.

Federal Reserve Bank of St. Louis

• Findings: A lot of disagreement among forecasters.
• Some see rising unemployment, while others predict it will fall.
• Inflation predictions are also mixed.

Bottom Line

Most forecasters think the economy will avoid a major downturn in 2026. But if you're not among the wealthy or working in AI, the news might not be as rosy.