Good evening. The economy is the biggest concern on voters’ minds — and for Republicans, the alarms are growing louder. Tonight, The Times’s chief economics correspondent, Ben Casselman, explains the state of the economy.
The state of the economy: Rising inflation and A.I. unease
Six weeks before the midterm elections, the cost of living is steadily marching upward. The price of gas has risen to a national average of $4.47 a gallon, up 41 percent since this time last year. The price of diesel fuel has reached a record high. The Federal Reserve raised interest rates last week for the first time in three years; mortgage rates have reached their highest level in more than a year. Politically speaking, these figures are deeply alarming to Republicans as Democrats try to turn the November election into a referendum on affordability. Polling tells us that voters view the economy as their top issue this fall — and the economy right now is, well, weird. Tonight, I want to sidestep the political spin and break down what’s really happening with the economy and the cost of living. Lucky for all of us, I’m not trying to do this on my own. I asked The Times’s chief economics correspondent, Ben Casselman, to guide us. The bottom line: “Broadly speaking,” he said, “the economy is not too bad, but the affordability issues that everybody is so worried about have gotten significantly worse.” Strong indicators — with a big A.I. question markWhen President Trump talks about the economy, he has pointed to a set of robust metrics, including the unemployment rate and the stock market, to insist that he has a success story to tell. It’s true, Ben says, that these longtime indicators of economic health look pretty decent. They’re just not the whole story.
So, is spending dropping and unemployment rising, as it does in a recession? No! But a big part of what’s driving the economy is investment in A.I. — and if you strip that away, the underlying economy isn’t so strong. This has created a great deal of uncertainty about where the economy is going, Ben said: “If A.I. succeeds, then it may kill all of our jobs. If it fails, then the whole economy falls apart, and your 401(k) blows up, and maybe you still lose your job. You can kind of understand why maybe people aren’t super enthusiastic about the state of things.” The affordability problemWe know that people don’t vote based on economic indicators. They vote based on how the economy feels to them — and that’s usually a question of the cost of living. (Just ask the Democrats in 2024.)
“Every piece of this affordability issue,” Ben said, “is getting worse rather than getting better.” CATCH ME UP
How potential 2028ers talk about A.I.I wrote recently about how A.I. was shaking up this election. It seems to be already shaking up the next election, too, as 2028 hopefuls rush to figure out — or change — their stance on the fast-developing technology. Here are a few: Gov. Josh Shapiro of Pennsylvania. Shapiro, a Democrat, was an early champion of A.I. data centers, but he backtracked after that proved to be a political albatross. He says the government should require third-party oversight of A.I. but he opposes an outright pause on development. Gov. Gavin Newsom of California. Newsom, a Democrat whose state is home to many A.I. companies, last week ordered the state to strengthen its A.I. safety laws. That represents a flip for the governor, who two years ago vetoed an A.I. safety bill with provisions similar to those he now supports. Vice President JD Vance. He has largely echoed Trump, who vehemently opposes new regulations. Vance said last week, “If you’re going to create Frankenstein, don’t come to the government and say, ‘We need regulation.’” Senator Ted Cruz. The Texas Republican called for “substantially more regulation” of A.I but said a full pause on development, or even slowing it down, would be a bad idea. Got a tip? NUMBER OF THE DAY $221 millionThat’s how much more Republicans and their allies are currently poised to spend on advertising than their Democratic counterparts, according to new data from the media tracking firm AdImpact. The total includes spending on Senate, House and state races. This week in pollsAs we approach Election Day, there are scads of interesting new polls coming out every day. I asked Ruth Igielnik, The Times’s polling editor, to highlight three that caught her eye.
You can find much more on The Times’s poll tracker, which updates daily with new polls from across the country. IN THE COMMENTS My colleague Reid Epstein answered readers’ questions in the comments on his recent story about Republicans’ midterm woes.
ONE LAST THING
Running shapeIn an interview on “CBS Mornings” today, Gov. JB Pritzker of Illinois revealed that he had dropped 80 pounds since he began taking GLP-1 weight-loss drugs in 2024. There is a long history of elected officials — Chris Christie, Jeb Bush and Cory Booker, to name a few — getting in better shape before a presidential run. But Pritzker, a Democrat, is keeping his cards close to his chest for now. “I have not made any decisions about what I might do in the future,” Pritzker said. “I can tell you, I want to be the governor of the state of Illinois for a while longer.” | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
