It’s officially economic forecast season.
As punctual as any holiday tradition, all the gurus polish their crystal balls to reveal their glossy business outlooks for the coming year.
Their work is curiously detailed, with seemingly exacting projections for numerous economic variables. These estimates look and feel authoritative, whether in fancy printed or digital form, especially when the outlook’s data includes multiple decimal places.
But for all that effort, the consensus usually goes like this: mild chance of bumpiness and otherwise a modest uptick – with a dash of blame for government on top.
Yet no degree in economics, a trusty spreadsheet or a “chief economist” title is required to make projections of future business conditions. The do-it-yourself forecast comes from living a life.
Your economic outlook’s goal is simple: Can I pay the bills, stash away a bit for the future, grow a nest egg – and maybe splurge once in a while?
To help with your prognostications, I’ve created 10 questions about your personal economy that will help build a 2026 outlook. (An online quiz replica IS HERE!)
Don’t undervalue your observations of local commerce – and what you hear from your family or friends. These are just as legitimate as forecasting tools as those fancy calculations from a professor or an economic analyst.
Remember, while doing your forcecast, that a guru’s stack of numbers provides a huge advantage: they remove much of the emotion from the calculations.
Contrarian minds do best. For example, you may hate crowds, but they hint at economic success. Or you may love the big sales, but they’re often a warning sign.
And when you’re thinking ahead, temper sentimental thoughts about the good ol’ days, wishful thinking of dream scenarios, or sheer partisanship.
It’s not hard, though. Just translate recent trends you’ve witnessed – good news or bad vibes – into patterns you expect to continue, or swings that may soon fade.
The 10-step program
1. Got a job? The economy is really all about the paycheck. Job security seems shaky these days. If a job is lost, the odds seem low that a replacement can be easily found. And rough working conditions may reflect the economic pressures employers face. What’s your workplace telling you?
2. How’s the raise? It’s a split world with the divide being whether your employer increases compensation to keep you ahead of the cost of living. It’d be even better if there were opportunities for extra pay or bonuses. Thin wage increases, or none at all, mean less money in the overall economy. What’s your paystub say?
3. It costs WHAT? Inflation was very high. Now it’s more moderate. For many people, it’s still difficult to afford basic necessities, let alone a treat now and then. Most gurus don’t understand this, as they debate laughable price measurements. What do your routine expenses show about the prices of real stuff?
4. Got a coupon? When “BOGO” at the store actually means “buy-one-get-one totally free” – be concerned. Remember, retailers don’t discount their goods or services heavily when the economy’s healthy. What does your bargain hunting tell you?
5. What’s your housing pain? Owners are learning that the mortgage is just part of the financial challenge as maintenance and insurance costs soar. Renters worry about what the landlord will charge next – or if you’ll be able to stay. Housing is the biggest household expense. Are yours manageable?
6. Another traffic jam? Transportation headaches are great economic indicators. Rough commutes, at odd hours, suggest a stronger economy. People must go places to make money. Even if it’s construction delays – that’s prime economic activity. How are your drives?
7. Who designed this lot? You learn a lot about the economy from the difficulty of finding a parking spot while shopping. Jammed lots during weekends is expected. But crowds midweek aren’t. How has parking changed for your trips to the mall?
8. Who copied my vacation plans? Assuming you have dollars for a day off or two, crowded out-of-town trips or packed local tourist traps indicate robust demand for leisure. If flights or hotels are easy to book – and priced attractively – then tourism is hurting. Do your travels provide economic hints?
9. Healthy or sick? Healthcare is the unpredictable monetary variable in most households that’s often ignored in traditional forecasts. Insurance premiums alone can break the bank. And if you need to see a doctor – if an appointment’s available – or require fancy medicines or care, budgets can get busted. What are your medical-cost realities?
10. I’m worth how much? Ignore all the confusing market benchmarks. Your bank accounts, retirement or investment statements, and/or a home’s valuation reveal plenty about what’s next for financial markets. The “wealth effect” is real: Gains or losses can swing consumer sentiment. What’s the trend for your net worth?
Bottom line
‘Tis the season for forecasting.
If your answers are joyous, it’s more likely 2026 will be good for your wallet.
Conversely, if they reveal some Scrooge-like negativity, those answers signal a dour year ahead.
And if your replies are a mix of good news and bad vibes, you seem to be torn about the future. Welcome to the club!
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
