Good morning, forward planners! Welcome back to The Economics Wagon, where we move past vague predictions and focus on realistic outlooks you can actually think about. Today’s issue zeroes in on the 2026 economic forecast, drawing heavily from the long-running work of Dr. James Doti and the forecasting team at Chapman University, one of the most closely watched independent economic forecasting groups in the U.S.
Rather than guessing headlines, this outlook focuses on trajectory: where growth is likely to slow, stabilize, or quietly improve as we move into 2026.
🧭 The Big Theme for 2026: Adjustment, Not Collapse
Chapman’s forecasts have consistently emphasized that the U.S. economy is not heading toward a dramatic breakdown, but rather a long adjustment period after years of shocks — pandemic disruption, rapid inflation, aggressive rate hikes, and global instability.
For 2026, the expectation is a more “normal” economy by historical standards, though not without friction.
Key characteristics shaping the outlook include:
slower but positive economic growth
easing inflation compared to recent peaks
a labor market that cools but remains functional
interest rates that are no longer rising sharply
consumers becoming more cautious and selective
In short: less chaos, more discipline.
📊 Growth Outlook: Moderate and Uneven
The Chapman forecast framework suggests that by 2026, GDP growth is likely to settle into a modest range, closer to the economy’s long-term potential rather than the boom-and-bust swings seen earlier in the decade.
What that looks like in practice:
growth driven more by productivity than stimulus
fewer broad surges across all sectors
stronger performance in services than goods
regional differences becoming more pronounced
Some industries will feel “slow,” others stable, and a few quietly strong — depending on labor needs, capital intensity, and exposure to interest rates.
🌡️ Inflation: Lower, But Not Forgotten
A central assumption in the Chapman outlook is that inflation continues to cool into 2026, but does not fall back to ultra-low levels seen in the 2010s.
That means:
price growth becomes more predictable
supply chain pressure continues easing
wage growth slows but stays positive
businesses regain some pricing clarity
Inflation in 2026 is expected to be more manageable — but still present enough to influence contracts, budgeting, and long-term planning.
As Dr. Doti has often noted in past forecasts, inflation doesn’t disappear overnight; it fades as behavior, policy, and expectations realign.
🏦 Interest Rates: Past the Peak, Watching the Plateau
By 2026, interest rates are widely expected to be past their tightening phase.
The Chapman outlook does not assume a rapid return to near-zero rates. Instead, it points toward:
rates stabilizing at higher-than-2010s norms
borrowing remaining more expensive than many grew used to
credit becoming more selective rather than restrictive
long-term investment decisions being more disciplined
This environment favors efficiency and balance-sheet strength over speculative expansion.
👷 Labor Market: Cooling Without Cracking
One of the more consistent themes in Chapman forecasts is that labor markets may soften without collapsing.
For 2026, expectations include:
slower hiring rather than mass layoffs
fewer job openings, but continued worker mobility
wage growth normalizing rather than reversing
ongoing skill mismatches in healthcare, trades, and tech
Unemployment may drift higher than recent lows, but not to levels typically associated with deep recessions.
🏘️ Housing and Investment Activity
Higher interest rates leave a lasting imprint on housing and capital investment.
By 2026:
housing activity may recover slowly, not explosively
construction remains constrained by cost and labor
commercial real estate continues to adjust, especially offices
capital spending focuses more on productivity and automation
The era of “cheap money fixes everything” is over — replaced by a return to fundamentals.
🌍 Risks the Forecast Still Flags
No forecast ignores uncertainty. The Chapman team consistently highlights risks that could change the 2026 outlook:
geopolitical conflict disrupting energy or trade
renewed inflation from supply shocks
fiscal stress from rising government debt
financial market volatility tied to global capital flows
These aren’t predictions — they’re pressure points worth watching.
🧠 What This Forecast Really Tells Us
The 2026 outlook is not about boom or bust. It’s about transition.
The economy appears to be moving toward:
steadier growth
fewer extremes
more realistic pricing of risk
greater emphasis on productivity and resilience
As Dr. Doti’s forecasting work often reflects, economic cycles don’t end with drama — they usually end with adjustment.
📌 Final Thought
The Chapman University forecast for 2026 paints a picture of an economy learning to operate again without emergency support. Growth continues, but discipline replaces excess. Planning replaces panic.
Understanding this kind of forecast isn’t about guessing the future — it’s about recognizing the environment you’re likely to be operating in.
That’s All For Today
I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙
— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.
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