Economists raise U.S. economic growth forecasts for this year and next, but warn that job growth will remain weak

According to a survey by the National Association for Business Economics (NABE), economists have raised their forecasts for U.S. economic growth this year and next, but expect job growth to remain weak. Respondent economists predict that inflation-adjusted U.S. Gross Domestic Product (GDP) is expected to grow by 1.8% this year, up from the 1.3% forecast in June. This upward revision primarily reflects a significant improvement in expectations for business investment. Economists also expect the U.S. economy to grow at a similar pace in 2026.

Meanwhile, NABE panel members expect average job growth in the U.S. to be 60,000 per month this year, down from the 87,000 predicted a few months ago. Job growth in the U.S. has noticeably slowed in recent months, a trend that prompted the Federal Reserve to cut interest rates by 25 basis points in September. Respondent economists expect the Federal Reserve to cut rates again by 25 basis points this year, followed by another 75 basis points cut in 2026.

Due to a series of significant and frequently changing policy shifts implemented by President Trump, forecasting the trajectory of the U.S. economy this year has been particularly challenging. For example, the impact of tariffs on inflation has been slower and more moderate than many economists expected. NABE panel members anticipate that U.S. inflation will remain above the Federal Reserve's 2% target until next year, but the year-on-year increase in the PCE price index is expected to decline from 3% this year to 2.5% by the end of 2026