Moodys senior economist picks market sectors to suffer in 2026

Published: Sunday, January 4, 2026 at 7:19 pm

Moody's Economist Predicts Sectoral Struggles in 2026 Despite Overall Growth

New York, NY – Moody's Analytics senior economist Mark Zandi anticipates a mixed economic picture for the United States in 2026. While projecting a stronger real GDP growth of approximately 2.5%, Zandi cautions that this expansion will mask significant challenges within several key market sectors.

The anticipated growth is largely attributed to deficit-financed tax cuts under the One Big Beautiful Bill Act, with the fiscal stimulus expected to peak in the second quarter of the year. However, beyond this initial boost, the economic landscape is expected to become more difficult. Zandi forecasts weaker job creation, rising unemployment, and higher inflation. These factors are expected to put pressure on labor-intensive industries and sectors sensitive to wage growth and consumer demand.

The financial markets are also expected to reflect this more subdued environment. Zandi predicts a more restrained stock market performance in 2026, suggesting limited upside for equities compared to recent years. The housing market is also expected to cool, with house price appreciation becoming more modest due to higher inflation and a softer labor market. This trend could strain real estate, construction, and related industries.

Zandi's outlook is informed by the performance of the US economy in 2025, which saw growth just above 2%, falling short of the expansion seen in 2024. Projections in 2025 were hampered by overly optimistic expectations, particularly around unemployment and inflation, both of which ended up higher than anticipated. This experience reinforces the caution embedded in the 2026 outlook, where fiscal stimulus may lift growth temporarily, but several major market sectors are expected to struggle as economic conditions tighten.

BNN's Perspective:

While the projected overall growth is encouraging, the potential for sectoral struggles warrants careful consideration. Policymakers should be prepared to address the potential impacts of rising unemployment and inflation, particularly on vulnerable industries and consumers. A balanced approach that considers both short-term stimulus and long-term economic stability will be crucial in navigating the challenges ahead.

Keywords: Moody's, economist, 2026, GDP growth, unemployment, inflation, financial markets, housing market, tax cuts, economic outlook, market sectors, real estate, construction, job creation, consumer demand

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