US economy expected to grow faster in 2026 despite stagnant job market: Goldman Sachs

Economic Growth Outlook - The U.S. economy is expected to experience accelerated growth in 2026, with a forecasted real GDP growth rate of 2.6%, surpassing the Bloomberg consensus of 2% [3][6] - The growth in 2025 was impacted by higher-than-expected tariffs, which increased the average effective tariff rate by 11 percentage points, contributing to a 0.6 percentage point reduction in GDP in the latter half of 2025 [2][6] Factors Driving Growth - Three main factors are anticipated to drive faster economic growth in 2026: reduced tariff drag, tax cuts from the One Big Beautiful Bill Act (OBBBA), and more favorable financial conditions due to interest rate cuts by the Federal Reserve [6][7] - Consumers are projected to receive an additional $100 billion in tax refunds in the first half of 2026, equating to approximately 0.4% of annual disposable income [7] Labor Market Insights - Despite the optimistic growth outlook, the labor market is not expected to see significant improvement, with the unemployment rate projected to stabilize around 4.5% in 2026 [8][10] - The unemployment rate rose from 4.1% in June to 4.6% in November, indicating a cooling labor market amid economic uncertainties [9] Inflation Trends - Inflation is expected to decline, with core PCE inflation projected to fall to just above 2% by the end of 2026, primarily due to diminishing tariff pass-through effects [12][13] - The current core PCE inflation rate is noted at 2.8%, largely influenced by tariff pass-through, which is expected to rise slightly from 0.5 percentage points to 0.8 percentage points by mid-2026 [12][13]