What Axios readers predict for the 2026 economy

• The odds a recession begins in 2026? It's a coin flip, you say — the median respondent put in 50%, up from 35% entering 2025.
• The median respondent saw inflation of 3.1%, higher than the 2.7% over the 12 months ended in November.

By the numbers: The 5% unemployment projection implies a meaningful rise from November's 4.6% reading, continuing a gradual upward movement in joblessness that began in mid-2023.

• You also saw continued weak job creation, with the median respondent seeing 42,000 monthly net growth in employers' payrolls next year — down from 55,000 in the first 11 months of 2025.

The intrigue: There was far less variance in your payrolls projections than last year — a standard deviation of 47,600, down from 162,000 last year.

• Translation: Last year, expectations were all over the map, with some readers anticipating a new hiring boom and others seeing job losses.
• Now, the expectations are much more tightly clustered around this low job-growth projection — and, over the last few months, that has been the reality.

Of note: You saw this soft job market being paired with continued growth in output, with a 1.9% median projection for GDP growth.

• That would be consistent with a world where companies are becoming more productive, proving able to increase output without adding large numbers of workers — whether due to AI or other advances.

Zoom in: The median Macro reader saw a year-end Federal Reserve target rate of 3.25%. The current rate (technically, the midpoint of the federal funds rate target range) is 3.625. That implies the median respondent sees it as a close call between either one or two additional rate cuts in 2026.

• That's slightly more rate-cutting than is implied by Fed officials' own projections. The median among Fed officials was a 3.4% midpoint in the target rate at year-end 2026 in projections released this month, implying only one cut.
• That said, Fed officials were also more optimistic about employment than Macro readers (median projection: 4.4% unemployment at year-end 2026), so it stands to reason that they wouldn't envision as much need for rate cuts.

State of play: The median respondent saw the 10-year Treasury yield ending the year at 4.05%, just slightly below current levels.

• You also saw a wee bit of tariff relief ahead, picturing a 15% weighted-average tariff by the end of next year, from 16.8% now.

What will be the biggest macro surprise in the year ahead? Many of you believe it will have something to do with AI.

• But that's where the similarities end: The extent of AI-related disagreement among Macro readers suggests the great uncertainty ahead.

What they're saying: "We'll see less [capital expenditures] for AI as businesses overestimate what AI can do," one reader who identified as an entrepreneur wrote.

• "Because of this, I see the job market improving for people with at least 5-10+ years of experience, but entry-level roles continuing to collapse, so we'll see a Gen Z backlash against AI," they added.
• Other readers simply wrote: "AI bubble will pop" or "AI bubble implodes."

But some of you were less pessimistic. One reader wrote in that AI would continue "to fuel stock prices," while another said the shock would be "AI growing jobs, not shrinking them."

• "AI investment will begin to pay off in small ways (roughly 1:1) — no bubble pop, but minimal [venture capital/private equity] early returns," wrote Chad C., an investor.

What to watch: Other predictions were related to some of the big known changes in 2026, including a new Fed leader taking the helm in May.

• One reader said: "The new Fed chair will recognize (maybe after an initial misstep) the criticality of Fed independence and resist political jawboning."
• Another said the biggest surprise would be "higher long-term rates despite Fed easing."

The biggest surprise of all might be that there is "no surprise" at all, Jay, a corporate executive, wrote.

• "Steady year with small job growth, tame inflation [and] no recession," Jay wrote.