What Happened?

Six economic imbalances, covering inflation, federal debt, trade, housing, labor and artificial intelligence, could slow or disrupt U.S. growth, according to a new analysis. The Congressional Research Service (CRS) published the report, Six Imbalances Facing the U.S. Economy, on Aug. 21. ​

Federal debt is on track to hit 100 percent of GDP in 2026, which would be the first time since World War II. CRS found the debt is projected to keep growing faster than the economy, a pace economists consider unsustainable.

Inflation peaked at 8 percent in 2022 and remains higher than in the decades before the pandemic. Federal deficits have exceeded 5 percent of GDP every year since fiscal 2020.

Why Does it Matter to Me?

The imbalances include inflation that remains above pre-pandemic levels, rising home prices and rents with higher mortgage rates, and a labor force that has declined since late 2025. Since the pandemic, housing prices, rents and mortgage rates have all risen while fewer new homes have been built per person. The homeownership rate has edged down, and fewer households are moving.

The U.S. labor force has shrunk since late 2025, a rare event in the post-World War II era, with industries and regions relying heavily on foreign-born workers disproportionately affected. AI appears to have contributed to moderately higher productivity growth and helped drive a surge in business investment, but CRS also flags the possibility of an investment bubble that could prove economically disruptive if it bursts.

Both Sides, Now

The imbalances do not necessarily mean a recession is likely, but CRS found they pose risks to continued growth if they unwind in a disorderly way.

President Donald Trump raised tariffs on imports starting in 2025, and the trade deficit has remained relatively large. The U.S. has run a trade deficit every year since 1976. A June 2026 Government Accountability Office report found publicly held debt had already reached $30.2 trillion, or 99 percent of GDP, and projected it would reach 123 percent of GDP within a decade.

Federal Reserve researchers estimated in April 2026 that tariffs put in place through November 2025 had raised core goods prices by 3.1 percent through February 2026. Congress has tools to address the broader imbalances, but CRS notes those policies involve trade-offs that could affect other parts of the economy.

What Happens Next?

Large deficits have already raised government borrowing costs and limited Congress's ability to respond to future crises. Harvard's 2025 housing report found that high home prices and elevated interest rates reduced homebuying.

Congress holds the main levers on federal spending, deficits and trade policy, and CRS says it has the tools to bring these imbalances closer into balance. No specific vote or legislative deadline has been set to address any of the six areas the report identifies. The central question is whether Congress will act before any of these imbalances unwinds in a way that disrupts the broader economy.

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