As we start 2026, the economy is top of mind for many people. Whether you’re trying to grow your small business, land a new job or refinance debt, it’s important to be aware of economic trends so you can position yourself accordingly.
Here are four economic trends to watch in 2026.
1. Despite lower consumer sentiment, consumer spending will continue
Over the last two years, consumer sentiment has been trending down according to the University of Michigan’s monthly survey. Its December 2025 survey reported that consumer sentiment had fallen by 28.5% year-over-year, even with a minor uptick in December for holiday spending.
However, despite declining sentiment, retail consumer spending is expected to continue in 2026. A recent report from Moody’s Ratings asserts that value-focused retailers are positioned to gain market share as consumers look for deals.
2. Labor market growth will continue to slow
Recent data from the Bureau of Labor Statistics revealed that unemployment climbed to a four-year high of 4.6% percent in November. In November, jobs increased by 64,000 but decreased by 105,000 in October.
Data suggest that many companies have slowed hiring and the research firm Challenger, Gray & Christmas reported that more than 1 million workers were laid off in 2025. Because businesses are experiencing slower consumer demand and global economic pressures, many are cautious about expanding their workforce.
3. AI is expected to transform the workforce
According to Thomson Reuters, AI is positioned to create transformational change to the U.S. workforce. In the next five years, it’s projected that an average of 56% of professionals’ work will utilize new AI-powered technology. AI is expected to have a high impact on professional services such as law, tax and accounting.
A survey from Thomson Reuters revealed that more than half of organizations that have adopted AI are seeing a return on their investment. Benefits include improved efficiency and productivity, improved response times and a reduction in errors. Some organizations are also seeing better outputs and reduced costs by leveraging AI.
Despite these advantages, many AI researchers believe that professionals will still play an important role because of human qualities such as empathy and the ability to make complex judgments. As companies continue to adopt AI tools, it’s predicted that professionals who adopt these technologies will gain a competitive edge.
4. Utah and Idaho are economically well positioned and are expected to expand
According to the Rich States, Poor States: ALEC‑Laffer State Economic Competitiveness Index, Utah has been ranked the No. 1 state in the nation for economic outlook for 18 consecutive years. Idaho has also consistently been ranked in the top-tier of states with strong economies, most recently placing seventh in WalletHub’s 2025 rankings of the Best & Worst State Economies.
These strong rankings are bolstered by significant in-migrations that fuel labor force expansion and workforce development. Consequently, the economies of both states are projected to surpass the national average for GDP and job creation in 2026.
Stay ahead of the curve with Zions Bank’s monthly economic snapshots
If you’d like to stay current with economic insights throughout the year, Zions Bank publishes monthly economic snapshots for each state in its footprint. Each snapshot features commentary from our Senior Economist Robert Spendlove and includes the most recent data on the labor market, interest rates, construction activity and other indicators of business activity.