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New Jersey’s electoral process just got upended

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THE DAY after Bob Menendez, New Jersey’s senior senator, was indicted for corruption, Andy Kim, a congressman, announced he would take on his powerful fellow Democrat in the upcoming Senate race. But the bigger obstacle to his bid was not Mr Menendez, whose support among Democrats quickly disappeared. It was an archaic primary process called the county line. New Jersey is the only state in America which brackets endorsements made by county party chairs and gives endorsees prime real estate on the ballot.

Party leaders give preferential placement to their candidates. Those not on the county line are tucked away in obscure rows and columns. Julia Sass Rubin of Rutgers University looked at 20 years of New Jersey races and found that the county line steered voters and helped preferred candidates by an average difference of 38%. Another study found county-line benefits ranged from four to 28 percentage points.

Mr Kim, who publicly opposed county lines before he got into the Senate race, had not intended to take on the antiquated system. But then Tammy Murphy, the wife of New Jersey’s governor, announced her candidacy. She immediately won endorsements from party leaders. Her connections all but guaranteed her county-line placement. Mr Kim filed a federal lawsuit asserting the system was unconstitutional.

Mr Kim says a number of politicos told him that they couldn’t speak out because they were worried their county chair would remove them from the line. He also blames apathy. The “well, that’s just Jersey” sentiment was entrenched. The same broken system protected Mr Menendez for years. “It was nerve-racking,” says Mr Kim, “in the middle of a statewide US Senate campaign to file a lawsuit that’s going to affect the party leaders of my own party.”

But then Mr Kim won some county endorsements and edged ahead of Mrs Murphy in polls. Last month she dropped out of the race. Mr Menendez said he would not run in the Democratic primary. And a federal judge ruled in Mr Kim’s favour. The demise of the county-lines system could affect the Senate race and next year’s governor’s race. “I don’t think it can be understated how big this is for New Jersey politics going forward,” says Ashley Koning of the Eagleton Institute of Politics.

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Economics

Consumer sentiment worsens as inflation fears grow, University of Michigan survey shows

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A shopper pays with a credit card at the farmer’s market in San Francisco, California, US, on Thursday, March 27, 2025. 

Bloomberg | Bloomberg | Getty Images

The deterioration in consumer sentiment was even worse than anticipated in March as worries over inflation intensified, according to a University of Michigan survey released Friday.

The final version of the university’s closely watched Survey of Consumers showed a reading of 57.0 for the month, down 11.9% from February and 28.2% from a year ago. Economists surveyed by Dow Jones had been expecting 57.9, which was the mid-month level.

It was the third consecutive decrease and stretched across party lines and income groups, survey director Joanne Hsu said.

“Consumers continue to worry about the potential for pain amid ongoing economic policy developments,” she said.

In addition to worries about the current state of affairs, the survey’s index of consumer expectations tumbled to 52.6, down 17.8% from a month ago and 32% for the same period in 2024.

Inflation fears drove much of the downturn. Respondents expect inflation a year from now to run at a 5% rate, up 0.1 percentage point from the mid-month reading and a 0.7 percentage point acceleration from February. At the five-year horizon, the outlook now is for 4.1%, the first time the survey has had a reading above 4% since February 1993.

Economists worry that President Donald Trump’s tariff plans will spur more inflation, possibly curtailing the Federal Reserve from further interest rate cuts.

The report came the same day that the Commerce Department said the core inflation rate increased to 2.8% in February, after a 0.4% monthly gain that was the biggest move since January 2024.

The latest results also reflect worries over the labor market, with the level of consumers expecting the unemployment rate to rise at the highest level since 2009.

Stocks took a hit after the university’s survey was released, with the Dow Jones Industrial Average trading more than 500 points lower.

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Economics

PCE inflation February 2025:

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Core inflation in February hits 2.8%, hotter than expected; spending increases 0.4%

The Federal Reserve’s key inflation measure rose more than expected in February while consumer spending also posted a smaller than projected increase, the Commerce Department reported Friday.

The core personal consumption expenditures price index showed a 0.4% increase for the month, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and and 2.7%.

Core inflation excludes volatile food and energy prices and is generally considered a better indicator of long-term inflation trends.

In the all-items measure, the price index rose 0.3% on the month and 2.5% from a year ago, both in line with forecasts.

At the same time, the Bureau of Economic Analysis report showed that consumer spending accelerated 0.4% for the month, below the 0.5% forecast. That came as personal income posted a 0.8% rise, against the estimate for 0.4%.

Stock market futures moved lower following the release as did Treasury yields.

Federal Reserve officials focus on the PCE inflation reading as they consider it a broader measure that also adjusts for changes in consumer behavior and places less of an emphasis on housing than the Labor Department’s consumer price index. Shelter costs have been one of the stickier elements of inflation and rose 0.3% in the PCE measure.

“It looks like a ‘wait-and-see’ Fed still has more waiting to do,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s higher-than-expected inflation reading wasn’t exceptionally hot, but it isn’t going to speed up the Fed’s timeline for cutting interest rates, especially given the uncertainty surrounding tariffs.”

Good prices increased 0.2%, led by recreational goods and vehicles, which increased 0.5%. Gasoline offset some of the increase, with the category falling by 0.8%. Services prices were up 0.4%.

The report comes with markets on edge that President Donald Trump’s tariff intentions will aggravate inflation at a time when the data was making slow but steady progress back to the Fed’s 2% goal.

After cutting rates a full percentage point in 2024, the central bank has been on hold this year, with officials of late expressing concern over the impact the import duties will have on prices. Economists tends to consider tariffs as one-off events that don’t feed through to longer-lasting inflation pressures, but the encompassing scope of Trump’s tariffs and the potential for an aggressive global trade war are changing the stakes.

Correction: Consumer spending increased 0.4% in February. An earlier headline misstated the number.

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