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Democrats suffer in statehouse races, too

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In February Democrats in Wisconsin celebrated when Tony Evers, the Democratic governor, signed into law new maps for the state legislature and Senate. The maps were the result of Democrat-aligned judges becoming the majority on the state Supreme Court, and the signing undid 13 years in which Republicans won lopsided majorities on thin vote margins. It constituted a “sea change”, said Ben Wikler, the state’s Democratic Party chairman, and on November 5th voters would have a real chance to throw out their Republican legislative leaders for the first time.

They didn’t. With several seats still undetermined, Republicans controlled 52 of the 99 seats in the state legislature—a big drop from their previous 64, but still a solid majority. They lost their supermajority in the state Senate, but retained control. Wisconsin reflected dashed hopes for Democrats down-ballot across America. Whereas in 2022 four state legislatures flipped to Democratic control, this time Republicans clawed some back. Overall, the result was a slight increase in divided government.

In Michigan Democrats lost their narrow trifecta, and that seemed likely in Minnesota as well, where two races are heading for recounts. In Pennsylvania, where the governor is a Democrat and his party controlled the House but not the Senate, they were on track to lose it. In New Hampshire, in one of the few competitive governor’s races, Kelly Ayotte, a Republican, beat her Democratic opponent comfortably, which means the party should retain its trifecta. Democrats also seemed unlikely to make good on hopes of taking the Arizona House of Representatives for the first time since the 1960s.

The news for Democrats was not universally bleak. They won the governorship of North Carolina, where Josh Stein defeated Mark Robinson, who was revealed to have described himself as a “black Nazi”. They also won the offices of the lieutenant-governor, attorney-general and superintendent of public schools and broke the Republican Party’s supermajority there, meaning that the state’s Republicans will have to negotiate with Mr Stein if they want to get legislation passed over his veto. Democrats also held onto their supermajorities in the state legislatures in New York and Illinois, despite the surges for Donald Trump in the presidential races there. Republicans did not add any states to the 22 they already completely control.

What does it mean? State governments are powerful. In Minnesota and Michigan, for example, taking control of governments in 2022 allowed the Democratic governors to pass swathes of legislation—legalising cannabis, introducing free school meals, expanding abortion rights, tightening gun-control laws and giving more power to trade unions. Had Democrats held or increased the number they controlled, they might have been able to mitigate some of Mr Trump’s national policies. Instead, the governors of those two states, Gretchen Whitmer and the losing vice-presidential candidate, Tim Walz, will probably finish their terms with fewer bills to sign.

Elsewhere, expanded Republican majorities may lead to more aggressive legislating. In Texas Greg Abbott, the governor, said he now has “more than enough votes” to pass a school-voucher programme, which he has tried and failed to get through the legislature, stymied by rural Republican holdouts. But Democratic strategists in several Republican-dominated states say the losses could have been far worse: with Joe Biden at the top of the ticket, some expected a “tidal wave” of new supermajorities. Chaz Nuttycombe, the president of State Navigate, which crunches data on state races, reckons that this year there may well have been more ticket-splitting, where voters chose Mr Trump and their local Democrat, than in 2020.

Polling from Pew published in May showed that voters consider the inability of Republicans and Democrats to work together to be the second-worst problem facing America, behind only inflation (which is now easing). In recent decades divided government had in fact been receding. The bounceback is modest, but division is going to be more entrenched.

Economics

Donald Trump has many ways to hurt Elon Musk

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THERE WAS a time, not long ago, when an important skill for journalists was translating the code in which powerful people spoke about each other. Carefully prepared speeches and other public remarks would be dissected for hints about the arguments happening in private. Among Donald Trump’s many achievements is upending this system. In his administration people seem to say exactly what they think at any given moment. Wild threats are made—to end habeas corpus; to take Greenland by force—without any follow-through. Journalists must now try to guess what is real and what is for show.

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Economics

Donald Trump has many ways to hurt Elon Musk

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THERE WAS a time, not long ago, when an important skill for journalists was translating the code in which powerful people spoke about each other. Carefully prepared speeches and other public remarks would be dissected for hints about the arguments happening in private. Among Donald Trump’s many achievements is upending this system. In his administration people seem to say exactly what they think at any given moment. Wild threats are made—to end habeas corpus; to take Greenland by force—without any follow-through. Journalists must now try to guess what is real and what is for show.

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Economics

Jobs report May 2025:

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U.S. payrolls increased 139,000 in May, more than expected; unemployment at 4.2%

Hiring decreased just slightly in May even as consumers and companies braced against tariffs and a potentially slowing economy, the Bureau of Labor Statistics reported Friday.

Nonfarm payrolls rose 139,000 for the month, above the muted Dow Jones estimate for 125,000 and a bit below the downwardly revised 147,000 that the U.S. economy added in April.

The unemployment rate held steady at 4.2%. A more encompassing measure that includes discouraged workers and the underemployed also was unchanged, holding at 7.8%.

Worker pay grew more than expected, with average hourly earnings up 0.4% during the month and 3.9% from a year ago, compared with respective forecasts for 0.3% and 3.7%.

“Stronger than expected jobs growth and stable unemployment underlines the resilience of the US labor market in the face of recent shocks,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.

Nearly half the job growth came from health care, which added 62,000, even higher than its average gain of 44,000 over the past year. Leisure and hospitality contributed 48,000 while social assistance added 16,000.

On the downside, government lost 22,000 jobs as efforts to cull the federal workforce by President Donald Trump and the Elon Musk-led Department of Government Efficiency began to show an impact.

Stock market futures jumped higher after the release as did Treasury yields.

Though the May numbers were better than expected, there were some underlying trouble spots.

The April count was revised lower by 30,000, while March’s total came down by 65,000 to 120,000.

There also were disparities between the establishment survey, which is used to generate the headline payrolls gain, and the household survey, which is used for the unemployment rate. The latter count, generally more volatile than the establishment survey, showed a decrease of 696,000 workers. Full-time workers declined by 623,000, while part-timers rose by 33,000.

“The May jobs report still has everyone waiting for the other shoe to drop,” said Daniel Zhao, lead economist at job rating site Glassdoor. “This report shows the job market standing tall, but as economic headwinds stack up cumulatively, it’s only a matter of time before the job market starts straining against those headwinds.”

The report comes against a teetering economic background, complicated by Trump’s tariffs and an ever-changing variable of how far he will go to try to level the global playing field for American goods.

Most indicators show that the economy is still a good distance from recession. But sentiment surveys indicate high degrees of anxiety from both consumers and business leaders as they brace for the ultimate impact of how much tariffs will slow business activity and increase inflation.

For their part, Federal Reserve officials are viewing the current landscape with caution.

The central bank holds its next policy meeting in less than two weeks, with markets largely expecting the Fed to stay on hold regarding interest rates. In recent speeches, policymakers have indicated greater concern with the potential for tariff-induced inflation.

“With the Fed laser-focused on managing the risks to the inflation side of its mandate, today’s stronger than expected jobs report will do little to alter its patient approach,” said Rosner, the Goldman Sachs strategist.

Friday also marks the final day before Fed officials head into their quiet period before the meeting, when they do not issue policy remarks.

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