US real GDP growth in 2035?
I think 2035 US real GDP growth is most likely to land in the 1.6% to 2.5% range, with a meaningful chance of slightly stronger growth. The market looks too pessimistic on the middle-of-the-road outcomes and gives too much weight to sub-1% or negative growth.
Analysis
With no fresh news available, the right anchor is long-run US trend growth rather than short-term cyclical noise. By 2035, the economy will likely be shaped by slower labor-force growth, continued productivity gains from technology and capital deepening, and the usual tendency for year-over-year GDP to cluster near trend rather than at extremes. That makes a center of mass around roughly 1.6% to 2.5% more plausible than either a sustained slump or an unusually strong boom.
Among the listed contenders, the most natural distribution is a modest skew toward 1.6% to 2.0% and 2.1% to 2.5%, with 2.1% to 2.5% slightly favored because nominal policy and productivity improvements can keep real growth closer to the upper end of historical trend. A 2.6% to 3.0% outcome is possible but should not dominate because that would require a fairly favorable combination of productivity, demographics, and policy over a full decade. The downside tail is real, but the probability of 0.0% or below looks overstated unless there is a major structural shock or repeated recession close to the measurement year.
Relative to the market, 14% on the broad Yes side and 86% on No feels overly defensive. The pricing implies a strong expectation that 2035 ends up outside the more normal growth bands, but macro history suggests the most common outcome is still a middling positive growth rate. I would treat this as a moderate mispricing in favor of Yes, mainly because the market appears to overweight recession or stagnation scenarios at a horizon where mean reversion and trend growth usually reassert themselves.
Arguments
For
- Arguments for Yes: Year-over-year GDP growth in 2035 is more likely to be a normal positive number than a collapse, and the middle ranges should capture most of that mass.
- Arguments for Yes: The US economy has historically had enough resilience and productivity growth to avoid extremely weak outcomes over long horizons.
Against
- Arguments against Yes: Structural aging and slower labor-force expansion may keep growth from reaching the upper ranges very often.
- Arguments against Yes: Long-horizon forecasts are vulnerable to shocks that can shift the distribution toward weaker growth more than expected.
Key drivers
- Long-run US trend growth is more likely to cluster around moderate positive rates than around recessionary or near-zero outcomes.
- Productivity gains from automation, software, and capital investment can keep 2035 growth above the weakest historical bands.
Risk factors
- Demographic slowdown and lower labor-force growth could cap trend growth below the mid-2% range.
- A major recession, policy shock, or persistent supply-side damage could push growth into the lowest buckets.
Scenarios
Best case
Productivity remains strong, investment stays high, and 2035 real GDP growth lands in the 2.6% to 3.0% range or higher, making the more optimistic buckets win.
Most likely
US growth in 2035 settles into a moderate positive range, most likely 1.6% to 2.5%, with the 2.1% to 2.5% bucket narrowly edging the 1.6% to 2.0% bucket.
Worst case
A recession, financial stress, or prolonged stagnation drives 2035 growth into the 0.0% or below bucket, with weak growth dominating the distribution.
Outcomes
| Outcome | AI | MKT |
|---|---|---|
| 2.1% to 2.5% | 28% | 14% |
| 1.6% to 2.0% | 27% | 13% |
| 0.0% or Below | 10% | 12% |
| 2.6% to 3.0% | 20% | 11% |
| 0.6% to 1.0% | 15% | 8% |
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