TechFlow, November 24 — The National Association for Business Economics (NABE) stated in its annual forecast survey that U.S. economic growth will slightly accelerate next year, but employment growth will remain weak, and the Federal Reserve will slow the pace of further rate cuts. The survey, which included 42 professional forecasters, showed a median projection of 2% growth, up from 1.8% in the October survey. Rising personal spending and business investment are expected to lift growth, but forecasters were nearly unanimous that the Trump administration's new import tariffs would drag growth by at least 0.25 percentage points.
The survey report noted, "Respondents identified 'tariff impacts' as the top downside risk to the U.S. economic outlook." Stricter immigration enforcement was also seen as a factor restraining growth, while productivity gains were viewed as the most likely driver pushing growth above expectations. Inflation is expected to close this year at 2.9%, slightly below the 3% projected in the October survey, and is forecast to decline only modestly to 2.6% next year, with tariffs expected to contribute 0.25 to 0.75 percentage points. By historical standards, job growth is expected to remain moderate, averaging about 64,000 new jobs per month—well below recent averages. The unemployment rate is projected to rise to 4.5% by early 2026 and remain at that level throughout the year. With inflation remaining elevated and unemployment only slightly higher, the Fed is expected to cut rates by 25 basis points in December, followed by another 50 basis points in reductions next year. (Jinshi)
