The 26th annual “State of the Region” report examines the performance of the regional economy this decade, asks how changes to federal trade, immigration and spending policy have impacted economic growth, and discusses what 2026 may hold for Hampton Roads.

Inflation continues to weigh upon consumers and businesses. In August, the headline rate of inflation was 2.9% and the core rate, which excludes food and energy prices, was 3.1%. While inflation was lower than its most recent peak of 9% in 2022, the most recent data suggest that price pressures are building, in part because of higher tariffs. The Federal Reserve argues that the current uptick in prices is “transitory,” but experience has shown that even short-lived bouts of inflation are painful.

We project that defense spending in Ham

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