Goldman Sachs Forecasts Accelerated US Economic Growth for 2026 Amid Tariff Easing and Tax Boosts

Goldman Sachs Projects Stronger GDP Growth

Goldman Sachs economists predict U.S. GDP growth will accelerate to **2.6% in 2026**, building on 2025's resilience. This outlook, led by Jan Hatzius, attributes the uptick to easing tariff impacts, tax cuts, and improved financial conditions.[1]

The forecast highlights how 2025's larger-than-expected tariffs raised the average effective tariff rate by 11 percentage points, dragging growth by 0.6%.[1]

With tariffs expected to ease, economists anticipate reduced headwinds from inflation and trade barriers entering 2026.[1]

Tax Refunds and Business Incentives Drive Consumer Spending

Consumers could see an extra **$100 billion in tax refunds** in the first half of 2026, equating to 0.4% of annual disposable income.[1]

The OBBBA's business tax provisions enable full expensing of plant and equipment, already boosting capital expenditure indicators.[1]

• These measures are set to stimulate investment and household spending.
• Forward-looking capex data shows early positive responses.[1]

Labor Market Faces Stagnation Despite Growth

Unemployment is projected to hold steady at **4.5%**, as firms navigate uncertainty.[1]

Economists warn of potential further rises if AI boosts productivity faster than expected or companies prioritize labor cost cuts.[1]

This stagnant job market contrasts with overall economic expansion, signaling cautious hiring amid policy shifts.[1]

Inflation Trends and Tariff Pass-Through

Core PCE inflation lingered at **2.8% in 2025**, largely due to tariff pass-through effects.[1]

Without tariffs, inflation would have dropped to about 2.3%, and further declines are expected as pressures subside.[1]

• Tariff reductions form a key pillar of the improved outlook.
• Combined with fiscal boosts, this supports a softer landing for prices.[1]

Key Factors Shaping the 2026 Outlook

Goldman Sachs identifies three main drivers for acceleration:

1. Diminished tariff drag on imports.
2. Enhanced tax refunds and business expensing.
3. Favorable financial conditions easing inflation.[1]

The report underscores 2025's unexpected tariff hikes as a temporary setback, now fading to reveal underlying economic strength.[1]

This projection arrives as markets digest year-end data, with implications for Federal Reserve policy and investor sentiment.[1]