Bullish On Stocks, Bearish On Groceries And Paychecks? Americans Split On 2026 Economy

Americans kicked off 2026 with cautious optimism—expecting the economy and stock market to strengthen in the months ahead, even as concerns over rising inflation and unemployment remain firmly in place.

Gallup's latest economic sentiment poll, conducted Jan. 2–17, finds that 50% of U.S. adults anticipate stock market gains and 49% forecast economic growth.

But 62% still expect inflation to climb, and half foresee higher joblessness—highlighting a nation split on where the economy is heading.

Optimism Rebounds After Tariff-Driven Pessimism In 2025

The survey results mark a recovery from sentiment seen in April 2025, when public confidence cratered in the wake of sweeping tariffs enacted by President Donald Trump on trading partners.

At that time, just 29% expected stock market gains, down from 61% in early 2025.

Now, as markets have stabilized, stock market optimism has bounced back 21 percentage points. Only 25% of Americans now expect equities to decline in the next six months.

Similarly, belief in economic growth has climbed from 38% to 49% since April. Fewer Americans now expect contraction, with only 36% predicting a shrinking economy.

Importantly, the Gallup survey anticipated the recent software-driven selloff that pressured tech stocks.

That shift in market leadership is already evident: the SPDR S&P 500 ETF Trust (NYSE:SPY) has gained only 1% year to date, while the tech-light SPDR Dow Jones Industrial Average ETF (NYSE:DIA) has surged to fresh record highs.

Interest Rate, Inflation And Job Market Outlook

Gallup found Americans evenly split on interest rates, with 41% expecting rates to fall and 36% expecting them to rise.

This is a reversal from last year, when most respondents braced for further tightening from the Federal Reserve.

“These readings are far more positive than the January 2022 reading, when a near-record-high 78% thought rates would increase,” the firm said.

Despite improvements in growth and market outlooks, Americans remain anxious about inflation and unemployment.

A strong 62% believe inflation will continue to rise, matching April's elevated reading.

Concerns over job losses are also climbing, with 50% now expecting higher unemployment, up 12 points from a year ago. Just 32% believe unemployment will decline, and only 16% see it staying flat.

These concerns reflect recent labor data showing slower job creation, particularly in service-heavy sectors affected by tighter immigration policies and automation.

“Americans' expectations for unemployment are worse today than last January and April,” Gallup said.

Deep Political Divide Persists In Economic Expectations

The survey found sharp partisan divides across all five economic measures.

Republicans are broadly bullish, with 82% expecting growth, 77% stock market gains, and only 24% forecasting higher unemployment.

“Republicans' views of all five economic aspects are similar to what they were one year ago at the start of Trump's second presidential term but better than in April,” Gallup states.

Democrats, instead, show a more cautious stance, with majority expecting rising unemployment, inflation, and interest rates. Views on the stock market are split evenly between gains and losses.

Independents are closer to Democrats in their assessments, with more expecting negative trends than positive ones.

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