Connect with us

Economics

Does Joe Biden’s re-election campaign have a Gaza problem?

Published

12 months ago

on

Listen to this story.
Enjoy more audio and podcasts on iOS or Android.

Your browser does not support the <audio> element.

IT IS NEVER nice for a campaign when a steadfast constituency turns irate and threatens to withhold their votes; it is the stuff of nightmares when they happen to reside in a swing state that may decide the next presidential election. Incensed over the Israeli military campaign in Gaza—which is fast approaching 30,000 Palestinian deaths—Muslim-American and Arab-American voters staged a campaign to withhold their votes for President Joe Biden in Michigan’s Democratic primary. Rashida Tlaib, a prominent Palestinian-American congresswoman representing the heavily Muslim western suburbs of Detroit, encouraged her fellow Democrats to vote “uncommitted”, as did most prominent Muslim officials in the state. Over 100,000 Michiganders voted “uncommitted”, representing 13.3% of the total vote.

The threat to Mr Biden is not veiled. “There is not really a path that does not go through Michigan. And there is not really a path that goes through Michigan without the Muslim community,” says Hira Khan of Emgage, a Muslim-voter mobilisation group. Michigan has had a recent spate of tight elections. In 2016 Donald Trump beat Hillary Clinton by a margin of 10,704 votes (or 0.22% of those cast); in 2020 Mr Biden won by 154,188 (or 2.78%). The state also has one of the highest concentrations of voters with Middle Eastern and Muslim backgrounds. In 2020 there were an estimated 206,000 Muslims in the electorate—roughly 2.8% of the total—and most of them probably voted for Democrats. If the anti-Gaza backlash persisted through November (including among the three-quarters of young voters who disapprove of Mr Biden’s handling of it), the effect would be marginal. But in a state like Michigan, marginal effects can matter quite a lot.

That is why the Biden campaign seemed particularly concerned. Weeks ago, it sent Julie Chávez Rodríguez, the campaign manager, to the state to meet Muslim leaders. The meeting was cancelled when all of them refused to attend. Reportedly, a suggested meeting with Vice-President Kamala Harris in Washington was also nixed. The White House dispatched senior policymakers, including Jon Finer, the deputy national security adviser. A recording of the conversation, published by the New York Times, shows Mr Finer being unusually self-critical: “We have left a very damaging impression based on what has been a wholly inadequate public accounting for how much the president, the administration and the country values the lives of Palestinians. And that began, frankly, pretty early in the conflict,” he said.

The listening sessions are only going so far. “I think they’re hearing the concerns. The problem is that they’re not acting on them yet,” says Alabas Farhat, a Democratic state representative who has been campaigning for the uncommitted vote.

Despite the display of discontent in the primary, it remains unclear how seriously the grumbling will jeopardise the president’s prospects in the general election. In 2012, when Barack Obama was running for re-election, 10.7% of Democratic primary voters in Michigan voted “uncommitted”, even though there was no concerted campaign to do so. Graded against that baseline, the 13.3% showing mustered by this campaign looks less impressive.

Back in 2012 the discontent was diffuse. This year it was concentrated. In some precincts of Dearborn, a heavily Arab-American city near Detroit, three-quarters of voters were “uncommitted”. If 100,000 Democratic voters were really willing to spoil their ballots in November in order to nix Mr Biden’s chances of winning, he would be in serious trouble. Yet the president would also face an electoral backlash were he seen to abandon Israel. In The Economist’s YouGov poll 36% of those questioned say their sympathies in the conflict are more with Israelis, while just 15% are more sympathetic to Palestinians.

Some Muslims say they are ready to abandon Biden and that his inability to restrain Israel is cause enough to make him a one-term president. Given Mr Trump’s evident antipathy to Muslim-Americans, his favour towards Israel and his general lack of concern for most things that sound like human rights, this might seem paradoxical. Ahead of the primary vote Gretchen Whitmer, the popular governor of Michigan, argued that “any vote that is not cast for Joe Biden supports a second Trump term.” Many Muslims concede that outcomes under Mr Trump would not have been better, but that there would be no offensive pretence of caring about human rights. “I prefer to be stabbed from the front than from the back,” says one.

Others say that Mr Biden can win back their support if he were to call for a permanent ceasefire, if he stops sending weapons to the Israelis and resumes funding the United Nations Relief and Works Agency (which was cut off after the Israelis said that several of its employees had taken part in Hamas’s attack on October 7th that murdered 1,200). Asked what happens in the next nine months, Abdullah Hammoud, the mayor of Dearborn, says: “That’s a question for President Biden.” ■

Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important electoral stories, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.

Related Topics:
Continue Reading

Economics

German inflation, March 2025

Published

23 minutes ago

on

March 31, 2025

By

Customers shop for fresh fruits and vegetables in a supermarket in Munich, Germany, on March 8, 2025.

Michael Nguyen | Nurphoto | Getty Images

German inflation came in at a lower-than-expected 2.3% in March, preliminary data from the country’s statistics office Destatis showed Monday.

It compares to February’s 2.6% print, which was revised lower from a preliminary reading, and a poll of Reuters economists who had been expecting inflation to come in at 2.4% The print is harmonized across the euro area for comparability. 

On a monthly basis, harmonized inflation rose 0.4%. Core inflation, which excludes food and energy costs, came in at 2.5%, below February’s 2.7% reading.

Meanwhile services inflation, which had long been sticky, also eased to 3.4% in March, from 3.8% in the previous month.

The data comes at a critical time for the German economy as U.S. President Donald Trump’s tariffs loom and fiscal and economic policy shifts at home could be imminent.

Trade is a key pillar for the German economy, making it more vulnerable to the uncertainty and quickly changing developments currently dominating global trade policy. A slew of levies from the U.S. are set to come into force this week, including 25% tariffs on imported cars — a sector that is key to Germany’s economy. The country’s political leaders and car industry heavyweights have slammed Trump’s plans.

Meanwhile Germany’s political parties are working to establish a new coalition government following the results of the February 2025 federal election. Negotiations are underway between the Christian Democratic Union, alongside its sister party the Christian Social Union, and the Social Democratic Union.

While various points of contention appear to remain between the parties, their talks have already yielded some results. Earlier this month, Germany’s lawmakers voted in favor of a major fiscal package, which included amendments to long-standing debt rules to allow for higher defense spending and a 500-billion-euro ($541 billion) infrastructure fund.

This is a breaking news story, please check back for updates.

Continue Reading

Economics

First-quarter GDP growth will be just 0.3% as tariffs stoke stagflation conditions, says CNBC survey

Published

1 hour ago

on

March 31, 2025

By

U.S. President Donald Trump speaks to members of the media aboard Air Force One before landing in West Palm Beach, Florida, U.S., March 28, 2025. 

Kevin Lamarque | Reuters

Policy uncertainty and new sweeping tariffs from the Trump administration are combining to create a stagflationary outlook for the U.S. economy in the latest CNBC Rapid Update.

The Rapid Update, averaging forecasts from 14 economists for GDP and inflation, sees first quarter growth registering an anemic 0.3% compared with the 2.3% reported in the fourth quarter of 2024. It would be the weakest growth since 2022 as the economy emerged from the pandemic.

Core PCE inflation, meanwhile, the Fed’s preferred inflation indicator, will remain stuck at around 2.9% for most of the year before resuming its decline in the fourth quarter.

Behind the dour GDP forecasts is new evidence that the decline in consumer and business sentiment is showing up in real economic activity. The Commerce Department on Friday reported that real, or inflation-adjusted consumer spending in February rose just 0.1%, after a decline of -0.6% in January. Action Economics dropped its outlook for spending growth to just 0.2% in this quarter from 4% in the fourth quarter.

“Signs of slowing in hard activity data are becoming more convincing, following an earlier worsening in sentiment,” wrote Barclays over the weekend.

Another factor: a surge of imports (which subtract from GDP) that appear to have poured into the U.S. ahead of tariffs.

The good news is the import effect should abate and only two of the 12 economists surveyed see negative growth in Q1. None forecast consecutive quarters of economic contraction. Oxford Economics, which has the lowest Q1 estimate at -1.6%, expects a continued drag from imports but sees second quarter GDP rebounding to 1.9%, because those imports will eventually end up boosting growth when they are counted in inventory or sales measures.

Recession risks rising

On average, most economists forecast a gradual rebound, with second quarter GDP averaging 1.4%, third quarter at 1.6% and the final quarter of the year rising to 2%.

The danger is an economy with anemic growth of just 0.3% could easily slip into negative territory. And, with new tariffs set to come this week, not everyone is so sure about a rebound.

“While our baseline doesn’t show a decline in real GDP, given the mounting global trade war and DOGE cuts to jobs and funding, there is a good chance GDP will decline in the first and even the second quarters of this year,” said Mark Zandi of Moody’s Analytics. “And a recession will be likely if the president doesn’t begin backtracking on the tariffs by the third quarter.”

Moody’s looks for anemic Q1 growth of just 0.4% that rebounds to 1.6% by year end, which is still modestly below trend.

Stubborn inflation will complicate the Fed’s ability to respond to flagging growth. Core PCE is expected at 2.8% this quarter, rising to 3% next quarter and staying roughly at that level until in drops to 2.6% a year from now.

While the market looks to be banking on rate cuts, the Fed could find them difficult to justify until inflation begins falling more convincingly at the end of the year.

Continue Reading

Economics

Tariffs to spike inflation, stunt growth and raise recession risks, Goldman says

Published

11 hours ago

on

March 30, 2025

By

U.S. President Donald Trump announces that his administration has reached a deal with elite law firm Skadden, Arps, Slate, Meagher & Flom during a swearing-in ceremony in the Oval Office at the White House on March 28, 2025 in Washington, DC. 

Andrew Harnik | Getty Images

With decision day looming this week for President Donald Trump’s latest round of tariffs, Goldman Sachs expects aggressive duties from the White House to raise inflation and unemployment and drag economic growth to a near-standstill.

The investment bank now expects that tariff rates will jump 15 percentage points, its previous “risk-case” scenario that now appears more likely when Trump announces reciprocal tariffs on Wednesday. However, Goldman did note that product and country exclusions eventually will pull that increase down to 9 percentage points.

When the new trade moves are enacted, the Goldman economic team led by head of global investment research Jan Hatzius sees a broad, negative impact on the economy.

In a note published on Sunday, the firm said “we continue to believe the risk from April 2 tariffs is greater than many market participants have previously assumed.”

Inflation above goal

On inflation, the firm sees its preferred core measure, excluding food and energy prices, to hit 3.5% in 2025, a 0.5 percentage point increase from the prior forecast and well above the Federal Reserve’s 2% goal.

That in turn will come with weak economic growth: Just a 0.2% annualized growth rate in the first quarter and 1% for the full year when measured from the fourth quarter of 2024 to Q4 of 2025, down 0.5 percentage point from the prior forecast. In addition, the Wall Street firm now sees unemployment hitting 4.5%, a 0.3 percentage point raise from the previous forecast.

Taken together, Goldman now expects a 35% chance of recession in the next 12 months, up from 20% in the prior outlook.

The forecast paints a growing chance of a stagflation economy, with low growth and high inflation. The last time the U.S. saw stagflation was in the late 1970s and early ’80s. Back then, the Paul Volcker-led Fed dramatically raised interest rates, sending the economy into recession as the central bank chose fighting inflation over supporting economic growth.

Three rate cuts

Goldman’s economists do not see that being the case this time. In fact, the firm now expects the Fed to cut its benchmark rate three times this year, assuming quarter percentage point increments, up from a previous projection of two rate cuts.

“We have pulled the lone 2026 cut in our Fed forecast forward into 2025 and now expect three consecutive cuts this year in July, September, and November, which would leave our terminal rate forecast unchanged at 3.5%-3.75%,” the Goldman economists said, referring to the fed funds rate, down from 4.25% to 4.50% today.

Though the extent of the latest tariffs is still not known, the Wall Street Journal reported Sunday that Trump is pushing his team toward more aggressive levies that could mean an across-the-board hit of 20% to U.S. trading partners.

Get Your Ticket to Pro LIVE

Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.

In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.

Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Continue Reading

Trending