Richmond Fed's Tom Barkin Highlights Resilient US Economy Amid Unemployment Ticks and Inflation Pressures in Latest Speech

Tom Barkin Delivers 2026 Economic Outlook

Richmond Federal Reserve President **Tom Barkin** spoke on January 6, 2026, outlining the U.S. economy's resilience entering the new year. He noted third-quarter GDP growth at a robust **4.3 percent** annualized rate, with core PCE inflation down to **2.8 percent** but still above target.[1]

Unemployment stands at a historically low **4.6 percent**, despite recent upticks in the last four reports. Barkin emphasized the need for finely tuned policy judgments to balance both sides of the Fed's mandate.[1]

Key Economic Drivers and Stimulus Ahead

Barkin pointed to productivity gains from AI investments countering slower labor supply growth due to lower immigration and retirements. Federal spending cuts have been milder than expected, supporting stability.[1]

Upcoming stimulus includes fiscal measures from recent tax legislation, lower gasoline prices, deregulatory efforts, and the effects of **175 basis points** in rate cuts over the past 16 months. High asset values continue to ease financial conditions.[1]

• GDP Growth: 4.3% in Q3 2025
• Unemployment: 4.6%, historically low
• Core PCE Inflation: 2.8%
• Rate Cuts: 175 basis points in 16 months

JPMorgan's Latest US Economy Prediction

On January 4, 2026, Fox Business discussed **JPMorgan's new 2026 prediction** for the U.S. economy, focusing on pro-business policies like tariffs on imports such as cabinets and furniture. Panelists addressed impacts on jobs amid post-Biden inflation concerns.[2]

The discussion highlighted AI training for future jobs tied to **$10 trillion** in needed investments, reflecting optimism in certain sectors.[2]

Business Leaders' Optimism Survey

JPMorganChase's recent survey shows U.S. business leaders entering 2026 with recovering optimism, especially among middle-market firms rebounding to last year's levels post-election.[3]

Top concerns include **economic uncertainty (49%)**, revenue growth (**33%**), and tariffs/labor issues (**31%** each). While **51%** do not expect a recession, only **39%** are optimistic about the national economy; small businesses focus on cash reserves and AI adoption (**59%** see it as essential).[3]

• Middle-market optimism surges after 2025 dips
• Small businesses building reserves (**47%**) and investing in tech
• **61%** expect AI to streamline operations

Market Performance Closes Strong 2025

U.S. markets ended 2025 positively, with S&P 500 and Dow Jones posting modest December gains, while Nasdaq dipped slightly. All major indices rose **15-21%** for the year, backed by resilient consumer spending.[4]

Q3 GDP at **4.3%** underscored economic expansion, with no immediate weakness signals highlighted in recent analysis.[4]