As 2026 approaches, economists are sharpening their forecasts amid an uncertain landscape shaped by a government shutdown, trade friction with China and questions about tariff-driven inflation risks.
“Although the labor market looks weak, GDP forecasts remain relatively positive,” said John Chang, chief intelligence and analytics officer at Marcus & Millichap. Consensus estimates call for growth of about 2.5% in the third quarter, slowing to 1% in the fourth quarter before rebounding to around 1.8% in 2026. As a result, Chang said, the risk of a near-term recession appears relatively low.
The Consumer Price Index (CPI) is expected to hold around 3% over the next several quarters and through 2026. Roughly two-thirds of economists believe the inflationary impact of tariffs will be a one-time bump followed by stabilization, according to Chang. Therefore, the economy could generate slow but steady gains through the coming year, he said.
Forecasts for the 10-year Treasury hover near 4.1% through the end of 2026, though Chang cautioned that such flat predictions may reflect uncertainty rather than conviction. These forecasts are generally optimistic, and if they hold, it would be positive for commercial real estate—supporting moderate but durable space demand that gradually lifts occupancy and rents, he said.
Unemployment projections remain steady in the mid-4% range, and many blue-chip economists have trimmed their break-even job creation estimate from 75,000 to 64,000 jobs per month. That reduction reflects an anticipated decline in international immigration, which means fewer new jobs are needed to keep unemployment flat. If the jobless rate remains stable, the economy would need to add only about 750,000 postions in 2026.
Taken together, the consensus forecast calls for slow growth, modest job creation and inflation that’s higher than the Fed prefers but to skyrocketing levels, Chang said. As a result, interest rates are expected to stay relatively low near 4%, without dropping much below current levels.
A steady economic outlook would offer a welcome reprieve from recent volatility and provide a foundation for commercial real estate demand, Chang said. Still, several headwinds could reshape the outlook for 2026, including evolving tariff policies, slowing job growth and inflation trends.
The delayed September inflation report, expected October 24 despite the shutdown, could shed light on whether inflation remains under control, Chang added. While optimism about the U.S. economy’s resilience is justified, headwinds remain that could shift the narrative, he said.
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