Market Forecast 2026
Economic
Outlook
THE U.S. ECONOMY IS EXPECTED TO BE RESILIENT WITH SLOW AND STEADY GROWTH
The U.S. economy enters 2026 with a renewed level of stability, exceeding earlier expectations.
In 2025, the country successively navigated several sources of disruption, including tariff-related pressures, policy uncertainty, and a softening labor market. Despite these challenges, overall economic performance remained relatively sound. Stable consumer spending, rising real incomes, and an unprecedented surge in investment tied to artificial intelligence played central roles in sustaining growth. Looking ahead, most forecasts anticipate steady expansion, a gradual decline in inflation, and a more balanced, though still softening, employment environment.
Labor market cooling remains an important near-term economic theme.
Both private and public sector hiring slowed considerably in the latter portion of 2025, and expectations for 2026 point to moderate but steady growth during the year. This trend is influenced by reduced immigration flows, an overall decline in job openings, and the growing use of automation as employers look for ways to manage operating costs more efficiently.
Unemployment is expected to hover near 4.5%. Several economists caution that the U.S. may enter a period in which economic output continues to rise while employment growth slows, a pattern reminiscent of the early 2000’s.
Total Job Growth Continues to Cool
Inflation has continued to normalize and is expected to ease further in 2026.
The inflation rate has steadily declined from the highs recorded in 2022 and 2023, remaining within a 2% to 4% range since 2024. Core inflation is expected to settle near 2.0% to 2.5% as the effects of tariffs fade, labor market pressures moderate, and rental costs stabilize. Even so, many households continue to feel the impact of elevated prices for utilities, housing, and basic goods. While inflation is trending in the right direction, it will likely remain slightly above the Federal Reserve’s long-term target of 2.0% until late in the year.
INFLATION REMAINS RELATIVELY STABLE
E-commerce growth is stabilizing as consumer shopping patterns normalize.
Growth in e-commerce has moderated as consumers return to more balanced shopping behaviors following two years of rapid online sales growth in 2020 and 2021. Pre-COVID, the annual rate of increase was approximately 15% per year between 2010 and 2018, but after a post-COVID normalization period, annual growth has slowed to a more consistent and stabilized pace of 7.2% since 2022.
Increasingly, shoppers are combining online activity with visits to physical stores, particularly within grocery, discount, and other retail categories that provide a catered and enjoyable customer experience. Softer job growth, tighter household budgets, increased credit card debt, and a moderation in discretionary spending are further contributing to this more measured pace of digital sales expansion.
E-COMMERCE SALES GROWING AT A SLOWER PACE
Investment connected to artificial intelligence continues to expand at an accelerated pace.
Throughout 2025, companies poured capital into data centers, automation infrastructure, and a wide range of AI enabled applications. This momentum is expected to continue in 2026 and beyond. Economists broadly agree that artificial intelligence will remain a central driver of productivity, business formation, and long-term economic growth.
Although corporate AI investment and overall adoption is still in the early stages, additional fiscal incentives and a deepening corporate adoption cycle are expected to support sustained investment, even as some organizations leverage AI to streamline operations and reduce hiring needs.
AI INVESTMENT CONTINUES TO SURGE
Overall conditions point to a stable start to the year with continued economic resilience.
Taken together, these factors suggest the U.S. economy will begin the year on solid footing. Strong consumer fundamentals, easing financial conditions, and historic investment in artificial intelligence are shaping a year characterized by steady expansion and improving stability.
Although the labor market has been cooling, and automation advancement may limit job creation, overall economic output is expected to remain healthy. Electronic commerce continues to normalize after years of exceptional growth, reflecting a more selective but still resilient consumer.
The year ahead will likely be defined by ongoing structural transformation, particularly in the areas of technology and productivity, which will influence economic performance and labor market dynamics for years to come. Many analysts also emphasize the continued rise in productivity, strengthened by rapid advances in artificial intelligence, as a key contributor to the economy’s resilience.
U.S. Real GPD Growth Remains Steady
ContactGARY BARAGONA |
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