Economic Issues to Watch in 2026
Ran across this at the Brooking site. There are more issues we should be watching. These are the five I consider to be the most important. I did not include everything for each topic. There is more information to be read which will flesh out each issue. On healthcare also, expect 20 million people to be disenfranchised due to Trump purposeful initiatives to eliminate people on the ACA and Medicaid. Higher prices for insurance will also play a part of his purposeful initiatives.
Health care and nutrition assistance changes
Legislation enacted in 2025 made deep cuts and major structural changes to Medicaid, the Affordable Care Act (ACA) marketplaces, and the Supplemental Nutrition Assistance Program (SNAP). With some of these policies taking effect in 2026, Watch how they’re implemented and how they impact health coverage, food insecurity, and financial hardship.
Several of the One Big Beautiful Bill Act (OBBBA) health care cuts take effect January 1, 2026, including policies making it harder for low-income people to sign up for ACA coverage and ending ACA tax credit eligibility for hundreds of thousands of low-income, lawfully present immigrants. In addition, policy-makers’ decision to let enhanced ACA tax credits expire (even as the OBBBA continued $3.9 trillion in other expiring tax cuts) will raise premiums starting in January. The Congressional Budget Office (CBO) projects that health care changes taking effect in 2026 will ultimately cause about 5 million people to lose health insurance.
Immigration and labor markets
In 2026, watch how reduced immigration flows reshape labor markets, tracking both labor supply and labor demand effects. Also how observers interpret a jobs picture that looks nothing like recent history.
The dramatic decline in immigration has fundamentally changed what constitutes healthy job growth. Average monthly employment growth has been just 17,000 since April, a level that historically would signal a labor market in crisis. Yet the unemployment rate has only modestly ticked up. This apparent contradiction exists because the sustainable pace of job creation has collapsed. With fewer immigrants entering the labor force, the economy needs far fewer new jobs to maintain balance. Analysis I recently published with Tara Watson and Stan Veuger estimates that healthy job growth could fall to zero or even turn negative by 2027.
Retirement security
One policy issue to watch closely in 2026 is the future of U.S. retirement security, particularly how legislators position themselves on Social Security’s financing challenges and the possibility of new reforms to the private retirement savings system.
The Social Security Trustees and the Congressional Budget Office have repeatedly warned the Old Age and Survivors Insurance trust fund is projected to deplete its reserves, with the Social Security Trustees most recently warning that exhaustion is expected in 2033. While the exact depletion date shifts slightly with each annual report, the overall message is unmistakable: Projected benefits significantly exceed projected revenues. Though it has been tempting to blame waste, fraud, and abuse for the program’s financial troubles, it is clear that strengthening the program’s future will involve difficult tradeoffs in terms of reduced benefits and/or higher revenues, and the window for gradual, less disruptive reform is narrowing.
Russian oil sanctions
In 2026, watch the extent to which policymakers quicken an end to the war in Ukraine through increased sanctions on the Russian oil trade. The first year of the Trump administration marked a sharp departure from the approach taken by the previous administration. While President Biden sanctioned 216 Russian shadow fleet tankers between February 2022 and January 2025, President Trump has yet to sanction a single one—even while the European Union and United Kingdom have sanctioned 482 and 435 vessels, respectively, since Trump’s inauguration. This stagnation occurred even in the face of mounting evidence that U.S. sanctions on oil tankers have an outsized impact relative to sanctions from other jurisdictions.
U.S. Trade policy
In 2026, I will be watching the continuing saga of U.S. trade policy, specifically how it filters through the U.S. economy and reshapes relationships with trading partners. U.S. trade policy experienced an unprecedented shift in 2025: The average U.S. tariff rate rose to about 17%—far above the less-than 3% rate that prevailed for most of the past three decades. Beneath that headline number, however, lies a more complex landscape: which industries are receiving protection and how tariff treatment varies across countries. These details will shape how trade policy ultimately affects the U.S. economy.
There is nothing difficult about the tradeoffs needed to fund Social Security forever. Workers just need to raise their own payroll “tax” about two dollars a week per year until the tax collected equals the benefits they will need when they can no longer work. They would not even notice the increase if it were not for people who know nothing yelling about difficult tradeoffs.