Goldman Sachs economists have indicated that tax cuts, rising real wages, and increasing household wealth will drive US economic growth this year, while inflation is expected to moderate.
In its "2026 US Economic Outlook Report" released on January 11, Goldman Sachs noted that, given increased uncertainty in the labor market outlook, the Federal Reserve is projected to implement two additional 25-basis-point interest rate cuts in June and September.
David Mericle, Chief US Economist at Goldman Sachs, wrote: "Over the coming years, the composition of US GDP growth will differ from the previous cycle. Growth will be driven more by productivity gains—which have already rebounded and are expected to strengthen further with advancements in artificial intelligence—and less by labor supply growth, primarily due to a significant reduction in current immigration levels."
A survey of economists conducted by media in mid-December revealed that respondents expect US economic growth in 2026 to be 2%, consistent with the projected growth rate for 2025. Market observers believe that tax cut proposals introduced by President Donald Trump will help sustain the US economy's relatively stronger growth compared to other developed nations.
Goldman Sachs offers a more optimistic economic forecast, as detailed below:
2026 US GDP growth: projected at 2.5% on a quarter-over-quarter basis, and 2.8% on a full-year annual basis.
Inflation metrics: by December, the year-over-year increase in the core Personal Consumption Expenditures (PCE) price index is expected to decline to 2.1%, while the core Consumer Price Index (CPI) is forecast to slow to 2%.
Unemployment rate: the baseline forecast anticipates the unemployment rate stabilizing at 4.5%, though there is a risk of "jobless growth"—where businesses may leverage artificial intelligence to reduce labor costs.
On trade, Goldman Sachs speculates that in the upcoming midterm elections, cost-of-living issues will become a central political topic, which may prompt the White House to avoid implementing further significant tariff increases.
Mericle also pointed out that, supported by tax cuts and rising real wages, household consumption expenditure is expected to achieve steady growth. Meanwhile, bolstered by accommodative financial conditions, reduced policy uncertainty, and tax incentives, business investment is projected to be the strongest driver of US GDP growth in 2026.
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