Goldman's Solomon: US Economy Will Accelerate Into 2026

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00:00The U.S. economy is in pretty good shape, and there are some very, very strong tailwinds that

00:06have really had a profound effect, and there are also some things going on that are creating

00:09headwinds and are probably leading the economy to, you know, underperform its expectation at

00:15this time, but I'm optimistic that we're probably going to see an acceleration as we continue to

00:19add into 2026. The big structural issue that's kept the U.S. economy going so well is the U.S.,

00:26and by the way, other developed economies around the world are running very aggressive

00:30fiscal stimulus plays. Governments are spending enormously into economies in the developed

00:36world, and that keeps the economy going even when you have other headwinds. The second big macro

00:41phenomenon that's affecting the U.S. economy is all of the AI infrastructure build, all the capital

00:46spending, all that's going into the ground to support the deployment, the development, the

00:51continued growth of AI infrastructure into the enterprise, and that's a big tailwind too.

00:56That's balanced on the other side by the implementation of the trade policies, which are still getting

01:01absorbed. I think we're seeing, you know, some of the effects from trade, but there's still,

01:07you know, there's still more to go in terms of really understanding how the trade policy

01:10is fully implemented and how it balances growth. And then obviously the world's a little bit

01:15more geopolitically fragile, and that has an impact on growth and, you know, kind of confidence.

01:21But when you balance it all, you saw the third quarter reading was quite strong. But year over

01:26year, from last December to this December, the overall growth trajectory would probably be a little

01:31bit less than 2%. And so that's slightly below trend, but still in pretty good shape.

01:37And an acceleration into 2026.

01:39I think that as the trade policies are absorbed and you have the continued stimulus and the continued

01:45kind of tech spend, you've got a pretty good tailwind. You know, I hear as I talk to CEOs

01:51that would kind of have their finger on the pulse, certainly the upper end of the economy is still

01:56spending quite strongly, a little bit more constraint on the downside, you know, the lower part of the

02:01economy. But I think the things you have to watch, you have to watch labor. There's no question labor

02:05shorts is a little bit softer. The Fed's watching labor carefully. And, you know, I think you've also

02:10got to watch inflation and whether or not the impact of trade is just a one-time price movement,

02:15or there's something, you know, more significant that comes through. And it's too early to know.

02:19And you touched on labor. How would you characterize the health of the U.S. job market right now?

02:24It's a little bit softer. And I think you can step back and you can understand why when you think

02:29about big enterprises and what's going on with technology, people are pausing hiring to really

02:34kind of evaluate how, as they bring this technology into the enterprise, they can automate, create

02:39efficiencies, reinvest. And so, you know, I think at the moment that's slowed hiring. And as a result,

02:45you know, the labor number is a little bit softer.