NH economist lowers forecast for 2026

A key New Hampshire economist has trimmed down to 2.2% his forecast for the growth in the state’s economy this for 2026, citing lackluster consumer confidence and the uncertainty of the U.S. war against Iran.

Brian Gottlob, director of the New Hampshire Economic and Labor Market Information Bureau and a well-regarded economist in the state, had earlier anticipated a 2.6% growth rate for the state.

But he now sees a “no-fire, no-hire” growth rate for the state’s economy. He expects the unemployment rate to rise to 4.5% this year.

Small businesses have particularly suffered. As a class, they’re not hiring, and they struggle to handle price increases related to tariffs, energy and wages.

“When I talk to businesses, it’s just not a good time to be adding workers because of the unknowns,” Gottlob said.

Gottlob provided the Spring Economic Forecast for the Greater Manchester Chamber of Commerce on Monday. The virtual event was sponsored by Key Bank and drew a little more than 50 business leaders from the greater Manchester area.

He attributed most factors affecting the state economy to national matters, including the Big Beautiful Tax Bill (good for short term stimulus, bad for long-term debt) and the war (inflation and reductions in consumer spending).

“I thought I had a pretty good idea of what was going to happen in 2026. I have a little less confidence in that now,” Gottlob said.

Gottlob cited the Federal Reserve’s preferred inflation measure, the personal consumption expenditure index. It shows a recent annual inflation rate of 2.9%, and that was before the United States and Israel started bombing Iran.

Inflation will grow with higher gasoline prices, slowing down the economy, he said.

Every $10 hike in the price of a barrel of oil translates into a median increase of 25 cents at the pump, he said.

So at $100, a barrel of oil translates into a $1 increase at the pump, and an estimated 0.6% reduction in the gross domestic product, Gottlob said.

The $4 a gallon price represents a psychological barrier that will ripple through the economy.

“It’s almost impossible at $4 a gallon gasoline to not have an impact on (consumer) spending,” Gotlobb said.

On Monday, AAA pegged the average price of regular gasoline at $3.53, and oil was selling for just over $100. But Gottlob said it will take several weeks for the full impact of $100 a barrel oil to hit the state.

Job data showed some contradictions.

The U.S. Bureau of Labor Statistics reported that the state lost jobs in November and December, a finding that Gottlob expressed skepticism over. Still, job postings for the first two months of this year are down compared to 2025. And New Hampshire has not reached its pre-pandemic labor force levels, while the labor force for the country as a whole is up 4% from its pre-pandemic mark.

Yet, claims for unemployment are at historic lows.

Gottlob had hoped for lower interest rates to aid in employment. Rates remain high, but they are offset by President Trump’s Big Beautiful Tax Bill and its tax benefits for employers.

Gottlob also noted a divided economy. High income households continue to spend because stock and home prices are elevated. But people on the lower levels are facing pressures and trimming spending.

Not all was bad news.

Default levels on large consumer debt items such as mortgages, autos and student loans are some of the lowest in the country. New Hampshire remains a favored environment for new businesses.

The state continues to draw migrants from both within and outside the United States.

And Manchester-Nashua shows a strong economy.

The two-city region tallied a 1.1% growth rate in private sector jobs last year, more than twice the rate of the state as a whole.

And while very few retirement-age people move into Manchester, nearly half of the net domestic immigration settling in Manchester was in the 25-to-34 age bracket.

Over the last couple of years, the city and the region have taken key actions that are coming to fruition, Gottlob said.

“Housing development has been solid. Your ability to capture the younger demographic (is) largely because of building quality rental housing in the city,” Gottlob said.