First Quarter 2026 Survey of Professional Forecasters

Forecasters Predict Higher Growth in 2026

The near-term outlook for the U.S. economy looks better now than it did three months ago, according to 37 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict the economy will grow at an annual rate of 2.6 percent this quarter, up from the prediction of 1.6 percent in the last survey. On an annual-average over annual-average basis, the forecasters expect real GDP to expand 2.5 percent in 2026, up 0.7 percentage point from the estimate in the previous survey.

A mostly unchanged path for the unemployment rate accompanies the outlook for growth. The forecasters predict the unemployment rate will increase from 4.4 percent this quarter to 4.5 percent in the fourth quarter of 2026. In the previous survey, the unemployment rate was forecast to remain unchanged at 4.5 percent over the same period. On an annual-average basis, the forecasters expect the unemployment rate to average 4.5 percent in 2026 and 4.4 percent over each of the next three years. These annual projections are nearly unchanged from those of the previous survey.

On the employment front, the forecasters predict job gains in the current quarter at a rate of 83,000 per month. The employment projections for the current quarter and the following two quarters show upward revisions from those of the previous survey. The projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 48,500 in 2026, down from the previous estimate of 55,200. (These annual-average projections are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)

The charts below provide some insight into the degree of uncertainty the forecasters have about their projections for the rate of growth in the annual-average level of real GDP. Each chart presents the forecasters’ previous and current estimates of the probability that growth will fall into each of 11 ranges. Notably, the forecasters have significantly increased their estimates of the probability that real GDP growth will be in the range of 2.5 percent to 3.9 percent in 2026.

• Mean Probabilities for Real GDP Growth in 2026 (chart)
• Mean Probabilities for Real GDP Growth in 2027 (chart)
• Mean Probabilities for Real GDP Growth in 2028 (chart)
• Mean Probabilities for Real GDP Growth in 2029 (chart)

The forecasters’ density projections for unemployment, shown below, shed light on uncertainty about the labor market over the next four years. Each chart presents the forecasters’ current and previous estimates of the probability that unemployment will fall into each of 10 ranges. The current unemployment rate probability projections for the next three years are little changed compared with the previous estimates.

• Mean Probabilities for Unemployment Rate in 2026 (chart)
• Mean Probabilities for Unemployment Rate in 2027 (chart)
• Mean Probabilities for Unemployment Rate in 2028 (chart)
• Mean Probabilities for Unemployment Rate in 2029 (chart)

Forecasters See Lower CPI Inflation in 2026

The forecasters expect current-quarter headline CPI inflation will average 2.7 percent at an annual rate, down from their prediction of 3.0 percent in the previous survey. Core CPI inflation over the current quarter will also be lower at an annual rate of 2.8 percent, down from the previous estimate of 3.1 percent. The predictions for current-quarter headline PCE and core PCE inflation are little changed compared with their predictions in the last survey.

Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 2.6 percent in 2026, down from 2.8 percent in the last survey. Forecasters expect fourth-quarter over fourth-quarter core CPI inflation to also average 2.6 percent in 2026, down from 2.9 percent in the survey of three months ago.

Projections for headline and core CPI and PCE inflation at other forecast horizons are little changed compared with those in the last survey.

Over the next 10 years, 2026 to 2035, the forecasters predict headline CPI inflation will be an annual-average rate of 2.30 percent. The corresponding estimate for 10-year annual-average PCE inflation is 2.20 percent. These 10-year projections are 0.08 percentage point lower and unchanged compared with those of the previous survey, which covered the 10-year horizon from 2025 to 2034.

The charts below show the median projections (the red line) and the associated interquartile ranges (gray areas around the red line) for 10-year annual-average CPI and PCE inflation. The charts provide historical perspective on the current survey’s slightly lower projection for 10-year CPI inflation and unchanged projection for 10-year PCE inflation.

• Projections for the 10-Year Annual-Average Rate of CPI Inflation (chart)
• Projections for the 10-Year Annual-Average Rate of PCE Inflation (chart)

The figures below show the probabilities that the forecasters are assigning to each of 10 possible ranges for fourth-quarter over fourth-quarter core PCE inflation in 2026 and 2027. Notably, for 2026, the forecasters have substantially raised their estimates for the probability that core PCE inflation will be in the range of 2.0 percent to 2.4 percent, compared with their predictions in the last survey.

• Mean Probabilities for Core PCE Inflation in 2026 (chart)
• Mean Probabilities for Core PCE Inflation in 2027 (chart)

Lower Risk of a Downturn in Real GDP in 2026

The forecasters see the risk of a contraction in real GDP this quarter at 17.8 percent, down from the previous estimate of 24.0 percent. In addition, they have also lowered their probability estimates for negative growth for the following three quarters, compared with their estimates in the survey of three months ago.

Forecasters State Their Views on House Price Growth over the Next Two Years

In a special question in this survey, panelists were asked to provide their forecasts for fourth-quarter over fourth-quarter growth in house prices, as measured by several alternative indices. The panelists were allowed to choose their measure from a list of indices or to write in their own index. For each index of their choosing, the panelists provided forecasts for growth in 2026 and 2027. 

Twelve panelists answered the special question. Some panelists provided projections for more than one index. The table below provides a summary of the forecasters’ responses. The number of responses (N) is low for each index. The median estimates for the six house price indices listed in the table below range from -0.5 percent to 2.0 percent in 2026 and from 0.9 percent to 3.1 percent in 2027.

Forecasters See Unchanged Long-Run Outlook for Growth

In our first-quarter surveys, the forecasters provide their 10-year annual-average projections for an expanded set of variables, including growth in output and productivity, as well as returns on financial assets.

As the table below shows, the forecasters expect real GDP to grow at an annual-average rate of 2.10 percent over the next 10 years, unchanged from their projection in the first-quarter survey of 2025. Ten-year annual-average productivity growth is now expected to be 1.80 percent, up from 1.60 percent previously.

The forecasters predict the S&P 500 returning an annual-average of 7.00 percent over the next 10 years, unchanged from the previous estimate in the first-quarter survey of 2025. The forecasters see the rate on 10-year Treasuries averaging 4.00 percent over the next 10 years, also unchanged from last year’s first-quarter survey. Three-month Treasury bills will return an annual-average of 3.00 percent over the next 10 years, down from 3.17 percent previously.

Technical Notes

Moody's Aaa and Baa Historical Rates

The historical values of Moody's Aaa and Baa rates are proprietary and, therefore, not available in the data files on the Bank’s website or on the tables that accompany the survey’s complete write-up in the PDF.

Delayed Release and Missing Historical Values

This survey’s public release was delayed from Friday, February 13, 2026, to Friday, March 6, 2026. Researchers at the Philadelphia Fed delayed the release so that the panelists would have available the historical jump-off values for 2025 Q4 and the full year of 2025 in formulating their projections. The U.S. Bureau of Economic Analysis released these values for GDP on Friday, February 20, 2026. We conducted the survey over the period from February 20 to March 2, with most responses received on the days leading up to the March 2 deadline.

Due to the federal government shutdown, we had incomplete historical monthly data available for the October 2025 unemployment rate and the CPI. We computed 2025 Q4 and the full year of 2025 historical values using interpolated October values available from Haver Analytics and provided these jump-off values to the panelists on the survey questionnaire. The panelists were permitted to use their own historical values. Some panelists used their own values; others did not.

The Federal Reserve Bank of Philadelphia thanks the following forecasters for their participation in recent surveys:

William Adams, Comerica Bank; Ed Al-Hussainy and Alexander Spitz, Columbia Threadneedle Investments; Scott Anderson and Doug Porter, BMO Capital Markets; Robert J. Barbera, Johns Hopkins University Center for Financial Economics; Peter Bernstein, RCF Economic and Financial Consulting, Inc.; Wayne Best and Michael Brown, Visa, Inc.; Seth Carpenter, Morgan Stanley; Gary Ciminero, CFA, GLC Financial Economics; Grant Collins, AIM Research, LLC; Andrew Davis, Bryn Mawr Trust; Rajeev Dhawan, Georgia State University; James Egelhof, BNP Paribas; Gabriel Ehrlich, Daniil Manaenkov, and Yinuo Zhang, RSQE, University of Michigan; Michael R. Englund, Action Economics, LLC; Tani Fukui and Shan Ahmed, MetLife Investment Management; Sacha Gelfer, Bentley University; James Glassman, Independent Economist; Jan Hatzius, Goldman Sachs; Ben Herzon and Patrick Newport, S&P Global Market Intelligence; Steve Kihm, Citizens Utility Board of Wisconsin; Yaniv Konchitchki, University of California, Berkeley; Thomas Lam, Independent Economist (Singapore); Matthew Luzzetti, Deutsche Bank; Brian Martin, Australia New Zealand Bank (ANZ); Robert McNab, Old Dominion University; Daniel Mershon. USAA; R. Anthony Metz, Pareto Optimal Economics, LLC; R. M. Monaco, TitanRM; Joel L. Naroff, Naroff Economics, LLC; Brendon Ogmundson, BC Real Estate Association; Panos N. Patatoukas, U.C. Berkeley, Haas School of Business; Michael Pearce, Oxford Economics USA, Inc.; Perc Pineda, Ph.D., Plastics Industry Association; Jason Prole, Capital Risk Management; Tim Quinlan, Wells Fargo; Luciano Rispoli, Advance Macro Research; Michael Roberts and Dan Roberts, Roberts Capital Advisors, LLC; Parker Ross, Arch Capital Group; Philip Rothman, East Carolina University; Allen Sinai and Noah Moudarres, Decision Economics, Inc.; Sean Snaith, University of Central Florida; Daniel Soques, University of North Carolina Wilmington; Stephen Stanley, Santander US Capital Markets; Charles Steindel, Editor, NABE Business Economics; Susan M. Sterne, Economic Analysis Associates, Inc.; Jordan Vickers and Maira Trimble, Eaton Corporation; Lawrence Werther, Daiwa Capital Markets America; Mark Zandi, Moody’s Analytics.

This is a partial list of participants. We also thank those who wish to remain anonymous.

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