Economy, weather, and CO2
U.S. macroeconomics
To generate the macroeconomic assumptions in the Short-Term Energy Outlook (STEO), we input STEO energy price forecasts into S&P Global’s Short-Term U.S. Macroeconomic Model to produce a conditional macroeconomic forecast. For more details on the macroeconomic model, see our documentation.
S&P Global’s forecast that underlies this STEO was finalized prior to the U.S. Supreme Court ruling that rescinded some tariffs. The forecast assumes an average effective tariff rate of approximately 14%.
Emissions
We forecast U.S. energy-related carbon dioxide (CO2) emissions to decrease by 1.7% in 2026 relative to 2025 and to decrease by an additional 0.1% in 2027 relative to 2026. In both years, decreases in CO2 emissions are due primarily to expected declines in coal consumption, most of which occurs at power plants for electricity generation.
Weather
The United States had a relatively mild February, averaging 4% fewer heating degree days (HDDs) than in February 2025, in contrast to the colder-than-normal temperatures in January. However, as this winter season (November–March) comes to an end, we expect the United States will average around 3,270 HDDs overall, 1% more than the previous winter and 2% more than the 10-year winter average, increasing fuel demand for space heating. Based on our current forecasts and data from the National Oceanic and Atmospheric Administration, we forecast that the United States will average around 530 HDDs in March, 14% more compared with March 2025 and 1% more than the 10-year March average.
