US economic growth will rise slightly next year, but job creation will remain slow and the Fed will slow the pace of future rate cutsaccording to economists surveyed by the National Association for Business Economics in the group’s year-end forecast survey.
The survey, carried out between November 3 and 11 among 42 professionals, showed an average growth forecast of 2%, higher than the 1.8% of the previous survey in October and which contrasts with the 1.3% forecast in June.
Rising personal spending and business investment are seen driving higher growth, offset by what the panel in a close consensus said that would be a drag on growth of a quarter percentage point or more from the Trump administration’s new import taxes.
“Respondents cite ‘tariff impacts’ as the biggest downside risk to the US economic outlook.considering both the probability of occurrence and the potential impact,” the survey reported.
Tightening immigration measures is also seen as a factor that could depress growth, while rising productivity is seen as the most likely factor to boost growth above forecasts.
Inflation is expected to end the year at 2.9%, slightly below the 3% predicted in the October survey, and to decline only slightly to 2.6% next yearwith tariffs responsible for between a quarter of a percentage point and almost three-quarters of a percentage point of that figure.
Job growth is seen as remaining modest by historical standards, at around 64,000 jobs a month, faster than expected this year but well below recent norms. The unemployment rate will rise to 4.5% in early 2026 and remain at that level throughout the year.
With persistent inflation and only a slight increase in unemployment, the Federal Reserve is expected to approve a quarter-point interest rate cut in December, but it will cut rates by just another half point next year, moving closer to what is considered a roughly neutral rate for monetary policy.
