Economists are sounding a surprising note of optimism about the U.S. economy under President Donald Trump, marking a dramatic shift from earlier gloom.
A January 2026 Wall Street Journal survey of 82 economic forecasters reveals upgraded expectations for growth, job creation, and interest rate trends, signaling stronger momentum as Trump heads into his second year in office.
Breitbart reported that after peaking at a 45% recession probability in April 2025 following the “Liberation Day” tariff policy, fears have dropped to a more manageable 27% in the latest survey, aligning with post-pandemic averages.
Back in spring 2025, nearly half of surveyed economists braced for a downturn within a year, spooked by potential fallout from Trump’s bold agenda of tariff hikes, tax cuts, and regulatory slashes.
Fast forward to January 2026, and the mood has flipped—GDP growth forecasts for the fourth quarter of 2025 jumped to an annualized 2.23%, nearly double the 1.14% predicted just three months prior in October.
Even first-quarter 2026 projections rose to 2.13% from 1.47%, suggesting the economy might just have the grit to handle Trump’s ambitious plans without buckling.
Supporters of Trump’s policies can point to these numbers as vindication—full-year 2025 growth is now pegged at 2.35%, up from 1.92% expected in October 2024, showing a belief in sustained momentum into 2026.
Job creation outlooks are also brighter, with economists predicting average monthly payroll gains of 64,535 over the next four quarters, a hefty 31% bump from the 49,367 forecast in October 2025.
Unemployment? Steady at a projected 4.52% by June 2026, barely moved from prior estimates and well below the panic-driven 4.68% feared in April 2025.
Critics who fretted that Trump’s approach might tank the labor market seem to be eating crow—earlier 2025 concerns about job losses are fading as the data points to resilience.
Even Federal Reserve policy expectations have shifted, with less aggressive rate cuts now anticipated; the federal funds rate is seen settling at 3.08% by the end of 2026, compared to 3.34% projected last April.
Long-term rates are creeping up too, with the 10-year Treasury yield forecast at 4.15% by mid-2026, a 45-basis-point hike from October 2024, reflecting less demand for safe-haven bets as pessimism wanes.
Here’s a kicker for those obsessed with runaway prices: inflation forecasts remain tame at 2.80% by June 2026, down from 3.03% in October, hinting that growth doesn’t have to mean sticker shock at the checkout.
While some economists initially warned that Trump’s tariff and tax moves could ignite inflation or derail progress, the latest survey suggests the economy’s sturdier than they thought—perhaps a lesson in not underestimating American adaptability.
So, as the progressive crowd grumbles about potential disruptions, these figures offer a quiet rebuttal: maybe, just maybe, a bit of bold policy can steer the ship without sinking it, and that’s a win worth watching in 2026.
