If the first full month of 2026 is any indication, this year’s midterm elections will be hard-fought. Primary contests begin in March and will give voters an early say in which candidates and issues appear on the November ballot. History generally does not favor the party in the White House, and with Republicans facing criticism over affordability, immigration enforcement, and President Trump’s foreign policy, Democrats are well positioned to win control of the House and perhaps even gain ground in the Senate as well. This report is the first in a series of updates we plan to provide on the midterms before ballots are cast.
The economic backdrop to this year’s midterms remains one of strong growth, with real GDP estimated to have risen at a 4.2% pace in the fourth quarter. Consumption has softened at the margin, but there is little evidence of a material pullback, with spending supported by income growth even as households remain sensitive to prices, and inflation is still running in the 2.5%–3.0% range. Recent data also suggest that tight labor market conditions reflect supply‑side constraints rather than a meaningful weakening in demand, with unemployment low and jobless claims remaining subdued. The stock market has also continued to advance, supported by firm business fixed investment and ongoing productivity gains. With the economy once again a top issue for voters, any changes in conditions and sentiment between now and November could prove decisive.
In this Economics Weekly, Richard de Chazal examines the key issues shaping voters’ views as the November midterm elections approach, assesses which parties are most likely to control the House and Senate, and considers the potential ramifications for the remainder of the Trump presidency.