In a speech in Detroit, President Trump highlighted recent growth and declining inflation as reasons the U.S. economy is positioned for 2026. He cited stronger-than-expected GDP growth in parts of 2025 and relatively stable inflation as evidence that the economy could improve further — a case the administration believes could benefit Republicans in November.
Inflation-adjusted real wages rose modestly in the year ending December 2025, with real average hourly wages rising about 1.1% from a year earlier, according to data from the Bureau of Labor Statistics.
A “Sold” sign sits outside a home after a snowfall in Geneseo, Illinois, on Monday, January 20, 2020. (Daniel Acker/Bloomberg via Getty Images/Getty Images)
The housing market showed late-season momentum, with existing home sales rising about 5.1% through December 2025 — the biggest monthly gain in nearly two years and the fourth straight month of increases, according to the National Association of Realtors. However, total home sales in 2025 remained near historic lows.
Together, these data points give the government economic indicators to emphasize as the midterm elections approach, although broader measures such as labor market trends and consumer confidence are showing mixed signals.
Piper Sandler Chief Economist Nancy Lazar said Thursday that the housing market recovery appears gradual and sustainable — pointing to an easing of mortgage rates, slower home price growth and some improvements in labor market conditions.
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She said affordability is starting to improve and could increase further in 2026 if wages continue to rise faster than house prices.
“I think a healthy, moderate recovery in the housing market is what we need. We don’t need another boom. We’ve had three boom and housing cycles since the 2000s, and each of them has led to a surge in home prices and made the affordability problem even more dramatic,” she told “Mornings with Maria.”
In this undated photo taken at an unknown location, a person holds a stack of money. Real wage growth was touted Thursday as a positive sign for the Republican Party. (iStock / iStock)
“Ultimately, a gradual recovery in housing is what we need. Affordability is improving and administration is helping with that. But the business cycle will also help as we move through 2026.”
Economist Art Laffer won’t predict whether improving economic data will translate into gains for Republicans in the medium term, but says the numbers themselves point to strong growth.
Former Reagan economic advisor Art Laffer gives his perspective on the current economic landscape and highlights strong GDP growth on ‘Varney & Co.’
“The last three quarters under Trump have seen incredible economic growth according to the most important number, which is real GDP,” Laffer said. “Real GDP growth is almost 5% annually. That’s incredible.”
Laffer also said the employment numbers mask the underlying strength, attributing weaker overall numbers to demographic trends rather than major job losses. He said job growth in some worker groups has offset slower growth in others.
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Piper Sandler Chief Global Economist Nancy Lazar joins ‘Mornings with Maria’ to analyze the state of the US economy in 2026, the impact of AI, a surge in consumer spending and more.
“That will be very good for Trump in the midterm elections, I think,” Laffer added. “But you need a pollster to know how the election will turn out.”
Market strategist Adam Johnson also struck an optimistic tone, pointing to strong companies profit growth and higher profit margins.
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He said productivity gains – including those linked to artificial intelligence – could support faster growth without fueling inflation.
