Economic Outlook 2026 Signals Steady Growth

Economic outlook for 2026 points to slow growth, stable inflation, and moderate job gains despite global and domestic uncertainty.

October 24, 2025

Jordan B.

Economists expect slow but steady GDP growth in 2026, with full-year projections around 1.8%.
Inflation is projected to hover near 3%, with tariff-related price increases seen as temporary.
Stable unemployment near 4.5% and lower job creation benchmarks reflect shifting labor dynamics.
10-year Treasury yields are forecast to hold near 4.1%, supporting commercial real estate activity.

Key Takeaways

Cautious Optimism Heading Into 2026

According to Globe St, economists expect the US economy to grow slowly but steadily next year. After a projected 2.5% GDP rise in Q3 2025 and a slowdown to 1% in Q4, growth may rebound to 1.8% in 2026.

John Chang, chief intelligence and analytics officer at Marcus & Millichap, said recent data points to a low risk of recession. However, he noted that uncertainty from the government shutdown and trade tensions continues to cloud the outlook.

Tariffs May Cause a Brief Inflation Bump

Inflation is likely to stay near 3% through next year. Chang said two-thirds of economists see tariff-driven inflation as temporary. He expects prices to stabilize once the initial effects fade.

The 10-year Treasury yield may remain close to 4.1%. While that projection suggests confidence, Chang said it also reflects market uncertainty. Still, if rates stay flat, commercial real estate could benefit from stable demand and gradual rent growth.

Labor Market Adjusts to Slower Growth

Economists expect unemployment to hold steady in the mid-4% range. Many have lowered their monthly job creation target from 75,000 to 64,000. The change reflects lower immigration levels, which reduce the number of jobs needed to maintain employment levels.

To keep the jobless rate flat, the economy would need to create about 750,000 jobs in 2026.

CRE Outlook Looks Stable — for Now

If projections hold, commercial real estate could see stable demand in 2026. Steady interest rates and modest job growth may support leasing and occupancy. However, risks remain.

Tariff changes, inflation surprises, and weaker job growth could still shift the outlook.

The delayed September inflation report—due October 24—may offer more clarity. Chang said the data will help determine whether inflation is under control or gaining momentum.

Bottom Line

Economists don’t expect a strong rebound in 2026, but the forecast calls for stability. That’s welcome news after recent economic swings. If inflation and interest rates stay in check, commercial real estate may find solid footing in the year ahead.