Tepid Economic Growth

The agricultural economy does not operate in a vacuum. General economic conditions influence it. The latest reports showed the U.S. gross domestic product (GDP) grew 4.3% in the 3rd quarter, surprising economists. Over the past twelve months, GDP has grown at an annualized rate of 2.8%. Inflation and unemployment rates have been creeping higher. The latest unemployment rate for November was 4.6%. And the total number of jobs only increased 0.6% over the past year. The inflation rate most recently clocked in at an annual rate of 2.7%. Consumer spending, which accounts for two-thirds of the U.S. economy, remains strong despite consumers’ “affordability” concerns and overall pessimism.

Economic growth is expected to continue in 2026, but at a slower pace. The lingering effects of higher tariffs, slower job growth, and consumer pessimism is expected to hold growth at bay. For agriculture, cooling domestic and global economies could mean slower demand growth, especially protein and restaurant demand, and slower exports. The USDA expects agricultural exports in the fiscal year ending in September to be down almost $2 billion, in part because of slower global economic growth.