Last year’s odd economy and what to watch for in 2026
By CHRISTOPHER RUGABER
WASHINGTON (AP) — The economy in 2025 was filled with contradictions, as growth was healthy while hiring slowed, inflation stayed elevated and unemployment rose.
Last year’s odd outcomes raise a host of questions for the upcoming year: Will a growing economy eventually boost the sluggish job market? Or are last year’s weak job gains a sign of a stumbling economy that could get worse?
There is another uncomfortable possibility: The economy could keep growing without much hiring, as technology — particularly artificial intelligence — enables more companies to step up their production of goods and services without adding more workers, leading to a “jobless expansion.”
Adding to the complications, the six-week government shutdown last fall disrupted the collection and publication of economic data, leaving policymakers at the Federal Reserve with a cloudier view of the economy that will only slowly clear up this year.
“2026 begins at a time when it is hard to say how 2025 ended,” Stephen Stanley, chief economist at Santander, an investment bank, said in a note to clients.