Economic Forecasts for 2026: What's the Buzz?

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. 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.The Economist magazine sees some bumps ahead, like trade wars and high deficits, but they don't think these will cause a major crash. They predict "mediocre growth" for 2026. Goldman Sachs is more upbeat, expecting U. S. GDP growth of 2. 6%. They believe tax cuts and easier financial conditions will boost the economy. Bank of America is also optimistic, especially about AI investment. J. P. Morgan, however, is a bit more cautious. They see a 35% chance of a recession due to trade wars, inflation, and a weakening labor market. EY, the accounting firm, predicts that "K-shaped" growth will continue. Wealthy Americans and AI companies will keep spending, but lower-income families will face higher prices and slower wage growth. The Federal Reserve Bank of St. Louis looked at various forecasts and found a lot of disagreement. Some see rising unemployment, while others predict it will fall. Inflation predictions are also mixed. So, what's the 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.