Goldman Sachs has released its economic outlook for 2026, predicting an acceleration in U.S. economic growth to 2.6% real GDP, surpassing the Bloomberg consensus of 2%. This projection follows a year in which growth was tempered by higher-than-expected tariffs, which significantly increased the average effective tariff rate on imported goods. The report identifies three primary factors contributing to the anticipated growth in 2026.

First, a reduction in tariff drag is expected, as the significant increase in tariffs in 2025 is projected to stabilize. Second, the One Big Beautiful Bill Act (OBBBA) is anticipated to provide consumers with an additional $100 billion in tax refunds, potentially stimulating spending. The act also includes provisions for businesses that allow for full expensing of capital expenditures, which is expected to enhance investment indicators.

Third, favorable financial conditions resulting from interest rate cuts by the Federal Reserve and advancements in artificial intelligence (AI) are expected to support economic growth. However, despite these positive indicators, Goldman Sachs does not foresee a significant improvement in the labor market. The unemployment rate, which rose from 4.1% in June to 4.6% in November, is expected to stabilize around 4.5% in 2026, with potential for further increases if companies prioritize cost-cutting measures.

Inflation is projected to decline, with core PCE inflation expected to fall to just above 2% by the end of 2026, largely due to the diminishing impact of tariffs. The economists noted that the pass-through effect of tariffs on inflation has been significant, and without these tariffs, inflation rates would have been lower. Overall, while the economic outlook for 2026 appears optimistic, the implications for the labor market and inflation remain areas of concern.

In contrast, a poll conducted by The Economist and YouGov reveals that only 23% of Americans believe their household finances will improve in the coming year, marking the lowest level of optimism since August 2024. In contrast, 25% of respondents expect to be worse off financially, a decrease compared to earlier in 2025. Notably, 41% of Americans anticipate their financial situation will remain unchanged, the highest percentage recorded since the poll began tracking this question in July 2024.

The data also highlights a decline in financial optimism among specific political affiliations. Among Independents, only 16% expect improvement, down from 31% at the start of Donald Trump's second term in January 2025. For Republicans, the expectation of better finances has decreased from 67% to 40%. Democrats have experienced a smaller decline, with 14% now expecting financial improvement, down from 18%. This trend reflects broader concerns about economic stability and the implications for social equity as financial expectations shift across different demographics.