NABE Annual Survey: US economic growth will accelerate slightly next year, but inflation is likely to remain high.

According to Mars Finance, on November 24th, the National Association for Business Economics (NABE) stated in its annual forecast survey that the US economy will grow slightly faster next year, but job growth will remain weak, and the Federal Reserve will slow the pace of further interest rate cuts. The survey, which covered 42 professional forecasters, showed a median economic growth forecast of 2%, higher than the 1.8% forecast in the October survey. Increased personal spending and business investment are expected to drive economic growth higher, but professional forecasters almost unanimously believe that the Trump administration's new import tariffs will drag down the growth rate by at least 0.25 percentage points. The survey report stated that "respondents consider the 'tariff impact' to be the biggest downside risk to the US economic outlook." Stricter immigration enforcement is also seen as a factor inhibiting economic growth, while increased productivity is considered the most likely factor to drive higher-than-expected economic growth. Furthermore, inflation is projected to be 2.9% by the end of this year, slightly lower than the 3% forecast in the October survey, and is expected to decline only slightly 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 modest, with approximately 64,000 new jobs added per month, well below recent averages. The unemployment rate is projected to rise to 4.5% in early 2026 and remain at that level throughout the year. Given persistently high inflation and a slight increase in the unemployment rate, the Federal Reserve is expected to cut interest rates by 25 basis points in December, but only by another 50 basis points next year, close to the roughly neutral interest rate level of monetary policy. (Jinshi)