Goldman Sachs Projects Stronger GDP Growth
Goldman Sachs economists predict U.S. GDP growth will accelerate to **2.6% in 2026**, building on the economy's resilience seen in 2025.[1]
This outlook, led by Jan Hatzius, attributes the boost to easing tariff headwinds, tax cuts, and improved financial conditions.[1]
Tariffs had previously dampened growth by raising the average effective tariff rate by 11 percentage points, cutting GDP by 0.6%.[1]
Key Drivers of Economic Acceleration
- Reduced Tariff Impact: Lower pass-through from tariffs will help core PCE inflation drop from 2.8% in 2025 toward the Fed's target.[1]
- Tax Refunds Boost: Consumers expected to receive an extra $100 billion in tax refunds in early 2026, equating to 0.4% of annual disposable income.[1]
- Business Investment Surge: Provisions in the OBBBA allowing full expensing of plant and equipment are already lifting capital expenditure indicators.[1]
These factors are poised to counteract 2025's challenges, including higher-than-expected tariffs and inflation rebounding near 3%.[1]
Labor Market Remains Stagnant
Despite growth prospects, unemployment is forecasted to stay elevated at **4.5%** due to firm uncertainty.[1]
Economists warn of potential further rises if AI boosts productivity faster than anticipated or companies prioritize labor cost cuts.[1]
The stagnant job market contrasts with accelerating GDP, highlighting uneven recovery dynamics.[1]
Inflation Trends and Policy Outlook
Core PCE inflation lingered at 2.8% in 2025 mainly due to tariff effects; without them, it would have fallen to 2.3%.[1]
Goldman anticipates progress in lowering inflation as tariff drags ease in 2026.[1]
This forecast underscores the U.S. economy's ability to adapt amid policy shifts and global trade pressures.[1]
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