Growth, investment, and productivity offer Republicans a stronger closing argument. Will voters give them credit next week?
Americans are heading into the midterm elections with plenty to complain about, especially when they fill their tanks or pay their bills.
But the economic picture contains considerably more good news than the prevailing political mood suggests. Production is accelerating, businesses are investing, and layoffs remain low. Republicans have something substantial to campaign on in these final days.
The economy expanded at a 3.4 percent annualized rate in the third quarter, up from 2.2 percent in the second. Those figures account for inflation. America is producing more goods and services, not simply spending more dollars to purchase the same things. The initial estimate will be revised, but the improvement is encouraging.
More revealing is the strength of private demand. Consumer spending and private fixed investment together grew at a 4.9 percent annualized rate. This measure excludes government spending, inventory changes, and international trade. It therefore provides useful evidence that households and businesses are sustaining the expansion.
That complicates a campaign narrative built around economic disappointment. Affordability remains a legitimate concern, but the country is also demonstrating considerable resilience. Voters can acknowledge expensive groceries while recognizing that the broader economy has strengths worth preserving.
Business investment is especially promising because its benefits can extend well beyond the current quarter. Companies purchasing equipment, upgrading software, or expanding facilities are increasing their capacity to produce in the future. Those decisions also generate demand for suppliers and contractors today.
September brought another encouraging signal: orders for durable goods rose 1.8 percent. Aircraft accounted for much of that gain, but orders for nondefense capital goods excluding aircraft also increased, following a stronger August advance. This underlying measure of equipment demand suggests businesses are continuing to plan and invest. www.census.gov
The artificial intelligence build-out is part of this story. Investment in computing equipment is creating physical infrastructure alongside technological capabilities. Data centers require construction, electrical equipment, cooling systems, and connections to power supplies. The opportunity reaches beyond the companies developing the software.
Whether every project succeeds is another question. Capitalism does not guarantee that every investment pays off. It does, however, allow businesses to pursue opportunities, compete, and discover more productive ways of working. America retains considerable advantages in that process.
Productivity may be the most consequential positive sign of all. Since the current business cycle began in late 2019, nonfarm business output per hour has grown at an average annualized rate of 2.1 percent, compared with 1.5 percent during the previous cycle.
Greater productivity creates room for higher compensation and lower production costs. Its benefits take time to spread, and the improvement cannot all be credited to one president or one technology. Nevertheless, it offers a foundation for lasting prosperity that another round of government checks cannot substitute for.
Manufacturing also deserves attention. Second-quarter manufacturing output increased at a 5.4 percent annualized rate, accompanied by improved productivity. By September, manufacturing employment stood 72,000 above its December 2025 low. Those are concrete improvements in a sector Americans have good reason to care about.
Meanwhile, new unemployment claims remain low. Employers are generally holding onto workers, even though hiring has been subdued. Keeping existing paychecks flowing helps support spending and reduces the danger of a downturn gathering momentum.
The Federal Reserve’s latest assessment reinforces that argument, describing strong economic activity and robust capital investment. Such findings deserve attention alongside the discouraging headlines about prices.
Will any of this blunt Republican losses next week? It could. The likeliest immediate political benefit may be motivating Republicans who are disappointed but remain persuadable about voting. Evidence of progress gives those voters a reason to defend the administration’s direction.
It could also reassure undecided voters who dislike high prices but hesitate to hand Democrats control of Congress. Economic management involves more than public frustration. Investment, production, and the conditions for future income growth deserve consideration too.
Republicans should acknowledge that household budgets remain strained. Then they should explain why expanding productive capacity offers a path toward improvement. Strong national growth will become politically more persuasive as families experience its benefits directly.
A favorable GDP release cannot erase months of frustration, and many ballots are already cast. But neither should forecasts of Republican defeat obscure encouraging developments. The economy is showing strength beneath the discontent. Whether voters reward that progress remains uncertain; Republicans now have a stronger case to make before they do.
(Contributing writer, Brooke Bell)