Ask an economist and you’ll get caveats. Ask a shopper at a mall and you’ll get impatience. The United States heads into 2026 with charts that gleam and headlines that cheer — but beneath the shine there are real tensions: concentrated gains, rising joblessness, and a bet-heavy reliance on artificial intelligence.
Gains that show up in GDP but not at the kitchen table
On paper the numbers look good. After a modest start to 2025, GDP growth surged in the July–September quarter to an annualised 4.3 percent, the strongest two-year stretch in recent memory and well ahead of peers in the eurozone and the UK. Stock markets finished the year strongly too: the S&P 500 climbed roughly 18 percent, leaving ordinary savers and retirement accounts better off on paper.
But Americans’ mood hasn’t caught up. The University of Michigan consumer-sentiment index sat near 53 in December — better than some of the panic years but still low by historical standards — and polls show 70 percent of people find local living costs unaffordable. Inflation has cooled from its 2022 peak but remained above central-bank targets (around 2.7 percent year-on-year in late 2025). Meanwhile the jobless rate has ticked up to about 4.6 percent, its highest level in four years.
That dissonance has a clear source: the gains are uneven. Wealthier households own most stocks and account for a growing share of spending; the top 10 percent now account for roughly half of consumption. Wage pressure exists, but it’s patchy, and many households still feel squeezed by mortgages, rents and everyday bills.
AI: growth engine, productivity promise — or a bubble?
A striking piece of the story is the outsized role of AI spending. Estimates suggest that AI-related investment accounted for as much as 40 percent of US growth in 2025, concentrated in a handful of tech giants building datacentres, chips and software. That investment has lifted measured output and corporate profits, yet its productivity payoff for the wider economy remains uncertain.
Some forecasters argue AI is the start of a new productivity wave that will lift long-term growth. Others warn of froth: high valuations, a narrow beneficiary set and the risk that expected efficiencies don’t materialise fast enough. That split shows up in market surveys — a tech-bubble burst tops many institutional risk lists for 2026.
The rush into data infrastructure and compute capacity is visible across corporate moves and research projects — developments that echo wider industry trends such as Microsoft’s latest image model and other large-scale AI pushes. For readers tracking infrastructure, projects like Microsoft Unveils MAI-Image-1 and exploratory efforts to decouple compute from terrestrial constraints (such as Google’s Project Suncatcher) underscore how capital-intensive this leap is. Tools that promise to pull insights from sprawling corporate data — for example, deeper integrations that mirror Gemini-style research plugged into email and drive — will matter for productivity once they’re reliably deployed at scale.
Tariffs, trade and a new normal for global growth
Trade policy has also reshaped the outlook. The return of higher tariff averages under recent US policy has raised effective rates dramatically from pre-2025 levels — a structural change that economists expect will trim cross-border trade, raise supply-chain costs and nudge firms toward reshoring or diversification. Forecasts for global growth show moderation in 2026 as firms and countries adapt.
Some of the tariff effects may be lagged: firms front-loaded imports in 2025 to avoid expected duties, muting immediate price effects. But those buffers thin with time, and analysts warn that the full inflationary hit could become clearer in the year ahead.
Fragile balance: fiscal, financial and political risks
Beyond AI and trade, several systemic risks loom. Governments that expanded spending or loosened fiscal rules in 2025 face scrutiny from bond markets; highly indebted countries are vulnerable to rising yields. In the US, the political calendar — including the end of a Fed chair’s term in May 2026 and debates over fiscal plans — adds uncertainty to monetary policy and market expectations.
Labour markets are another fault line. Hiring demand cooled last year across advanced economies, and unemployment rose in both the US and the UK. Rapid AI adoption could lift productivity while also displacing roles in some sectors; how firms retrain or redeploy workers will shape both social outcomes and consumer demand.
A practical note for businesses and households
For businesses, the immediate imperative is to be realistic about scenario planning: plan for continued strong tech investment but stress-test models against slower consumer demand and higher trade costs. For households, the year ahead will likely be one of relative caution — protecting savings, watching interest-rate moves, and recognising that headline GDP growth won’t automatically flow into every neighborhood.
There’s no single narrative that neatly explains 2026’s prospects. Growth, technology and markets have aligned to produce strength in selective pockets, while broader fragilities have not gone away. The economy is simultaneously proving more resilient than pessimists feared and more brittle than the cheerful press releases imply.
Call it a work in progress: a high-stakes experiment in whether industrial-scale AI investment, new trade rules and cautious central banks can produce durable, broadly shared gains. If you tuned in for fireworks, you might get them — but the safest bet is on a messy, interesting year instead of a straight-line boom.