Barclays forecasts that the U.S. economy will stabilize and slow down, with tariffs and jobs posing a risk

Barclays expects quarter-on-quarter growth in the US economy to average about 2 per cent from the third quarter of 2025 to the third quarter of 2026. The forecast reflects that the economic expansion remains solid, but the pace of growth will tend to slow as fiscal stimulus fades and trade headwinds persist. The bank said the recently implemented tariffs would have a "chronic draining" effect on economic activity, with most businesses expected to gradually pass on higher import costs rather than triggering an immediate price spike. This could ease inflationary data pressure in the short term, but prolong the period when corporate margins are under pressure. Barclays also warned that the main downside risks to its economic outlook come from a slowdown in consumer spending and a possible rise in unemployment, which could hit confidence and discretionary demand heading into 2026.