The economic backdrop entering the second half of 2026 is more complex than it was at the start of the year, as growth has re-accelerated meaningfully, but so has inflation. Despite geopolitical conflict, higher oil prices and persistent inflation, the U.S. economy has continued to show underlying strength, with strong corporate earnings, rising manufacturing activity, and a labor market that has proven more resilient than first-quarter data suggested.

After accelerating in the summer, the U.S. economy decelerated meaningfully into the winter: according to the Bureau of Economic Analysis’ (BEA) second estimate, real Gross Domestic Product (GDP) grew at an annualized 0.7% in Q4 2025, down from 4.4% in Q3.

After stumbling early in the year, the U.S. economy accelerated meaningfully into the summer: according to the Bureau of Economic Analysis initial report, real Gross Domestic Product (GDP) grew at an annualized 4.3% in Q3 2025, up from 3.8% in Q2.