Barclays sees 2% U.S. growth pace through 2026, flags risks from tariffs and jobs

Barclays expects U.S. economic growth to average around 2% quarter-on-quarter between the third quarter of 2025 and the third quarter of 2026, reflecting a steady but moderating expansion as fiscal stimulus fades and trade headwinds persist.

The bank said recently imposed tariffs will act as a “slow burn” on activity, with most firms expected to pass on higher import costs gradually rather than in an immediate price surge. That could cushion near-term inflation readings but prolong pressure on corporate margins.

Barclays also warned that the main downside risks to its outlook stem from softer consumer spending and a potential uptick in unemployment, which could weigh on confidence and discretionary demand heading into 2026.

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Barclays’ tempered 2% growth forecast supports expectations of a soft landing and steady Fed policy in 2026. The bank’s warning on consumer fatigue and unemployment could dampen equity optimism if labour data weakens further.

This article was written by Eamonn Sheridan at investinglive.com.