Despite tariff wars and trade deals taking a toll on American consumers and business owners, the economic outlook for 2026 appears strong, according to experts, both nationwide and in North Carolina.
Dr. Michael Walden, an economist and professor at North Carolina State University, says that North Carolina is in a much stronger position heading into 2026 than most of the country.
“I’ve been doing this for almost 50 years; North Carolina always looks better on virtually every metric, and here in the Triangle, probably another step higher than that,” Walden told Spectrum News 1. “So we are in a good place to weather some of these economic challenges here in North Carolina.”
Walden, however, acknowledges the weight felt by American consumers as they watch prices rise due to inflation and tariff costs.
“American businesses have been paying these billions of dollars that are going into the tariff fund, if you will, and they are increasingly passing those on to consumers,” said Walden.
Consumers are feeling the impact, as many of their salaries are not keeping pace with rising prices due to inflation and tariff costs, according to Walden, who is expected to release his 2026 economic outlook report in the coming weeks.
Walden told the Carolina Journal that he compared the growth rate of the first three quarters of 2024 to the first three quarters of 2025, as 4th-quarter numbers are not yet available for 2025. The growth rates are for real GDP, which is the value of the total output of goods and services after adjusting for inflation.
“The growth rates are very similar for the two years: 1.93% for 2024 and 1.86% for 2025,” Walden told CJ.
North Carolina also saw a growth in manufacturing in 2024, with an economic output of $108 billion, accounting for 14.5% of the state’s GDP, according to the NC Department of Commerce. Manufacturing is divided into durable and nondurable goods. In 2024, manufacturing generated $62.6 billion of the state’s GDP or 60.3% of 2024 manufacturing. Durable goods accounted for $41.3 billion of the GDP or 39.7% of 2024 manufacturing.
Experts are predicting an optimistic economic forecast nationwide as well. Fox News reported that Goldman Sachs economists wrote in their 2026 outlook that a greater-than-expected impact from the tariffs impacted 2025’s economic growth. Sachs’ economists predict faster growth in 2026, forecasting a 2.6% increase in real GDP.
Vanguard economists also expect the economy’s growth rate to accelerate in 2026, putting the GDP growth rate at 2.25%, according to an Investopedia report. The unemployment rate is also predicted to drop to 4.2% from the November 2025 level of 4.6%. Vanguard economists are on track to be among the most accurate on Wall Street for their 2025 forecast.
“We always have humility with the forecasts, no question about that,” Josh Hirt, a Vanguard economist who helped prepare the forecast, told Investopedia. “But I think we’re in a very good range.”
According to the latest report from the Bureau of Economic Analysis (BEA), real GDP increased 4.3% in the third quarter of 2025 and 3.8% in the second quarter. The price index for gross domestic purchases increased 3.4% in the third quarter and 2.0% in the second quarter.
“The personal consumption expenditures (PCE) price index increased 2.8 percent, compared with an increase of 2.1 percent,” according to the report. “Excluding food and energy prices, the PCE price index increased 2.9 percent, compared with an increase of 2.6 percent.”
While these predictions are only for 2026, and economic analysts do not wield a crystal ball, experts have been remarkably accurate with their forecasts in recent years and remain optimistic about continued growth at both the state and national levels in 2026.