Economists raise their forecasts for U.S. economic growth next year, expecting the Federal Reserve to slow the pace of interest rate cuts

The U.S. economy is expected to grow modestly in 2026, but job creation is expected to remain weak, according to a new survey by the National Association for Business Economics (NABE). The survey was conducted Nov. 3-11 and included 42 professional forecasters. The median forecast for economic growth in 2026 is 2 percent, up from 1.8 percent in the last round of the survey in October. Reuters reported that this contrasts sharply with the 1.3 percent growth forecast in the June survey. The median forecast from respondents also showed that inflation is expected to close at 2.9 percent this year (slightly lower than the 3 percent forecast in October) and only slightly fall back to 2.6 percent in 2026. Economists attribute a significant portion of inflation to tariffs. At the same time, economists expect job growth to remain weak, with monthly non-farm payrolls expected to average 58,000, down from 60,000 in the October survey. They also forecast monthly non-farm payrolls to average 64,000 in 2026, down from 75,000 predicted in the October survey. The unemployment rate will rise to 4.5% in early 2026 and remain at that level throughout the year. In terms of the Fed's interest rate path, a 25 basis point rate cut is expected in December and just another 50 basis points in 2026, bringing the policy rate closer to neutral. (Jin X)