The Briefing, Vol. XIV, Issue 2
Jan. 12, 2026
This week:
- 5 percent GDP growth?!
- Minneapolis incident will test broader popularity of Trump’s immigration enforcement
- House majority faces another squeeze due to vacancies
Outlook
‘Golden Age’ possible? On Jan. 8, the Atlanta Fed announced that real gross domestic product had been running at an annualized 5.4 percent growth during the fourth quarter of 2025, according to its GDPNow model.
If accurate, this would be astounding. A First World economy does not normally have such rapid growth except in the most unusual circumstances — for example, it’s in the midst of recovering from a sudden catastrophe. This is the sort of number the Chinese government arrives at only by heavily cooking its books. Even 4 percent growth is considered very hot for the U.S. — but indeed, 4.3 percent is just what third quarter 2025 real GDP growth turned out to be, up from 3.8 percent in the second quarter.
The Atlanta Fed’s model, which has updated again since and will again later this week, continues to suggest growth greater than 5 percent. This is just an estimate, and just one model. But let’s put it together with the jobs numbers for December. According to Bureau of Labor Statistics numbers released Friday, unemployment remains low (back down to 4.4 percent) despite massive reductions in the federal workforce (277,000 since last January). Although job creation has not been especially impressive, job openings remain historically high — there were 25 percent more job openings in November 2025 than there had been ten years earlier. Some have suggested this is related to the departure (mostly voluntary) of more than 2.5 million illegal immigrants, and the near-total stemming of the tide of new arrivals at the border. There are enough jobs to go around. The number of employed among native-born Americans has consistently topped pre-COVID levels only in the last few months.
New inflation numbers for December will be released tomorrow — the rate was 2.7 percent in November, above the 2 percent target rate.
That’s a lot of numbers to say that yes, there’s still a chance President Trump gets something of a boost from the economy — or perhaps more accurately, that he won’t be crushed as badly by it as some presidents are in midterms.
To put it gently, and without getting too optimistic, the picture just might be a bit better than the doomsayers have been suggesting, with the constant hints that a colossal recession is just around the corner. Things might just work out, as long as Trump doesn’t induce a panic like the one from April with wild new tariff announcements, a Justice Department investigation of soon-to-exit Fed Chairman Jerome Powell that could undermine short-term faith in the Fed’s decisions, or bizarre Elizabeth Warren-like policies toward federal contractors.
ICE-Minneapolis: The recent and tragic officer-involved shooting of an activist who had been following and interfering with ICE immigration enforcement in Minneapolis in her car has become a national cause for the political far Left. The consensus view of the incident is that the officer involved genuinely feared for his life the moment she threw her car into drive and revved her engine, but that she was probably intending to flee the scene rather than to hit him.
It is a bigger and open question whether this incident or others like it could turn the public’s sympathy against Trump’s immigration enforcement in general — one of his more popular issue areas.
So far, the protest activity seems limited to the usual suspects — the revolutionary socialist organizations that typically show up with pre-printed signs ready to protest almost anything and form the backbone of protests such as “No Kings” and “Tesla Takedown.” But a human being is dead, and that could potentially change the equation.
Iran: Iran’s regime might be on the edge of collapse. It goes without saying that everyone would benefit from such a thing. But it would be a mistake to think that such an occurrence would have positive political consequences for Trump, even if it has positive consequences for the U.S. in the long run.
Americans feel and notice the worst ill-effects of foreign policy — as when they irrevocably lost faith in the Biden administration after its botched withdrawal from Afghanistan — but that doesn’t mean they appreciate wins the same way.
The closest modern precedent is probably that of 1990. Democrats gained in midterm elections one year after the Berlin Wall fell and Eastern Europe was liberated from communism. Republicans lost ground in both the House and the Senate in 1990, although their losses that year were minimal (7 seats and one seat, respectively). In the next presidential election, George H.W. Bush was trounced in the Electoral College, despite the huge levels of popularity he had temporarily achieved with a massive win in the Gulf War.
Senate 2026
Alaska: Axios reported last week that former Rep. Mary Peltola (D) will announce for Senate next month against Sen. Dan Sullivan (R). But it looks like she moved the timeline forward and announced this morning. Previously, she had been viewed as a likely candidate for the governorship, which opens up with the retirement of term-limited Gov. Mike Dunleavy (R). But Peltola was heavily courted by Senate Minority Leader Chuck Schumer (D-N.Y.) over the summer to run for Senate instead, and this appears to be where she is headed.
Peltola has a pretty good statewide record for a Democrat, having won two at-large House races in 2022 — first an August special election, then the November general election — thanks in large part to the state’s ranked-choice voting system.
The last time a Democrat was elected to one of Alaska’s U.S. Senate seats was in 2008, when former Sen. Mark Begich (D) just barely defeated the late Sen. Ted Stevens (R) — at the time just convicted on corruption charges that were later overturned. Begich was defeated by Sullivan in 2014.
House 2026
California-1: The unexpected death of Rep. Doug LaMalfa (R) at just 66 years old, combined with the resignation this month by Rep. Marjorie Taylor Greene (R-Ga.), puts House Speaker Mike Johnson back into a bind.
There are currently 218 Republicans and 213 Democrats — something to keep in mind in the event of another government shutdown later this month.
The seat of the deceased Reps. Sylvester Turner (D-Texas) will be filled after a special election later this month. The seat of former Rep. Mikie Sherrill (D-N.J.), now governor of New Jersey, will be filled in an April 16 special election. Intervening between those two will be the April 7 runoff election to replace Greene.
Given the composition of those seats, the House will likely be 218 Republicans to 214 Democrats, then 219 to 214, then 219 to 215. Voters will not likely replace LaMalfa until at least June.
