US economic state at the end of 2026?: how this market works

What you need to know

This market asks which of four economic conditions the United States will be in by the end of 2026, based on just two numbers: the unemployment rate and the inflation rate. A 'Soft Landing' means jobs are plentiful and prices are reasonably under control. 'Overheating' means jobs are still plentiful but prices are rising too fast. 'Stagflation' is the worst of both worlds: high unemployment and high inflation at the same time. 'Slack' means inflation is tame but too many people are out of work. The market settles using two official US government reports for December 2026, both published by the Bureau of Labor Statistics. Unemployment must be below or at/above 5.0%, and inflation (measured as the 12-month change in the Consumer Price Index) must be below or at/above 3.5%. The combination of those two numbers determines which outcome wins. One important edge case: if either December 2026 report is not published before January 31, 2027, the most recent available monthly data is used instead. None of the provided news headlines relate directly to the US economy or to US unemployment and inflation trends. They cover companies and markets in Latin America, India, South Africa, and France. There is no relevant recent news to point to here. The kind of developments worth watching would be US Federal Reserve interest rate decisions, monthly US jobs reports, and Consumer Price Index releases as 2026 progresses. This market covers roughly 18 months of future economic activity, which is a long time for a lot to change. The US economy sits near the boundary of two outcomes right now, and small shifts in trade policy, interest rates, or global conditions could push it in different directions. The thresholds themselves add uncertainty: an inflation reading of 3.4% versus 3.6% produces completely different outcomes. The market currently prices Soft Landing as most likely at 46%, but nearly as many participants see some form of elevated inflation ahead, reflecting genuine disagreement among people watching the same data.

The odds right now

• Soft Landing (Unemployment <5.0%, Inflation <3.5%)-3.0 pts (1w)46%
• Overheating (Unemployment <5.0%, Inflation ≥3.5%)-5.5 pts (1w)28%
• Stagflation (Unemployment ≥5.0%, Inflation ≥3.5%)+1.5 pts (1w)14%
• Slack (Unemployment ≥5.0%, Inflation <3.5%)+2.7 pts (1w)5%

Price history

How this resolves

Resolves January 31, 2027

The unemployment rate is defined as the seasonally adjusted unemployment rate (total unemployed as a percent of the civilian labor force, denoted as U-3) reported by the Bureau of Labor Statistics in the Employment Situation release. The inflation rate is defined as the 12-month percent change in the Consumer Price Index for All Urban Consumers (CPI-U), before seasonal adjustment, as reported by the Bureau of Labor Statistics in the Consumer Price Index release. Read the full resolution rules on the live market page.

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