From AI bubble fears to the job market’s ‘Great Freeze’: Economists answer your biggest questions about 2026
Monday, January 26, 2026
If strong economic headlines aren’t lining up with the way the economy feels to you, take it from the nation’s top economists: This is one of the strangest economic moments in recent memory (at least since an unforeseen global pandemic brought the gears of commerce to a sudden halt in 2020).
On paper, growth is going gangbusters. The U.S. economy expanded at a robust 4.3% annual pace in the third quarter of 2025, the fastest pace in two years. Forecasters expect another solid showing in the final months of the year, and Federal Reserve officials believe the economy will hang onto that momentum in 2026.
Typically, booming growth goes hand in hand with rapid hiring and big raises. Instead, wage gains are slowing, hiring has largely flatlined since the summer of 2025 and unemployment is the highest in more than four years.
For a decade, Bankrate has been conducting quarterly polling with the nation’s top economists on their expectations for the job market, inflation, the Federal Reserve and economic growth. Read on to learn what 20 of these economic leaders had to say about the year ahead.
1. Will the job market get better in 2026?
Probably not by much.
Most economists surveyed (79%) think unemployment will increase in the year ahead. The average forecast among economists calls for a 4.5% unemployment rate by December 2026, up slightly from its current level of 4.4%.
Unemployment has been steadily increasing
The nation's unemployment rate hit 4.6% in November 2025, the highest in more than four years.
Economists also expect employers to add 64,500 jobs a month, on average, over the next 12 months. That’s up slightly from the previous 12-month pace of 49,000 jobs, according to the latest Department of Labor data. Yet, hiring is nowhere near as robust as it was when the economy was roaring back from the pandemic. Only two economists pencil in a solid year for job growth with 100,000 positions or more a month.
Hiring could improve in the second half of the year as higher tax refunds make their way through the economy and trade uncertainty eases, economists told us. By historic standards, though, job growth may keep looking tepid, as supply-depressing factors like an aging population and a slowdown in immigration constrain hiring.
Just one predicts that unemployment will edge back toward a half-century low of 3.8% in the year ahead. The rest (95%) think unemployment will stay at 4% or higher.
These expectations come as the Federal Reserve cuts interest rates to cushion the job market. Those cuts may be helping prevent deeper damage, according to economists’ forecasts, but they’re not reigniting hiring.
2. Will the U.S. economy avoid a recession this year?
Despite their cautious outlook on the job market, economists say the U.S. economy has a solid chance of sidestepping a recession again in 2026 — at least for now.
The average odds of the U.S. economy entering a downturn this year stand at a little more than 1 in 4 (28%), according to the economists featured in Bankrate’s survey.
Recession odds have fallen to the lowest level in a year
Experts say the U.S. economy has a 28% chance of entering a recession by the end of 2026.
The U.S. economy has been defying economists’ expectations for years now. During the Fed’s aggressive rate hikes to tame decades-high inflation, economists’ perceived probability of a downturn soared as high as 65%, on average. A recession, however, never came to fruition.
The odds of a recession in Bankrate’s Q4 survey are the lowest in a year — economists in the prior-quarter survey gave the U.S. economy a near 2 in 5 chance (39%) of contracting.
Full article @ https://www.bankrate.com/banking/federal-reserve/economic-indicator-survey/#job-market