Steady but unspectacular economy fuels GOP midterm worries as Democrats grapple with ‘radical’ image problem 

A new jobs report ahead of the midterms is painting a picture of an economy that’s healthy but hardly the engine voters expected in President Donald Trump’s second term. And one new survey indicates that some voters are giving Republicans lower marks on the economy, which could make the midterms more difficult for the GOP.

Still, the general economic picture is far from the dire days of hyperinflation that hurt Democrats under former President Joe Biden. And an increasingly radical and out-of-touch Democrat base may be giving the GOP reason for hope.

The latest Job Openings and Labor Turnover Survey, or JOLTS, showed the number of job openings declined by an estimated 178,000 in June, not a statistically significant change.

“The number and rate of job openings were little changed at 7.4 million,” the Bureau of Labor Statistics wrote in its June release.

Despite promises by critics of the Trump administration that tariffs and deportations would lead to dislocations in the labor market, the JOLTS survey has remained remarkably steady under the administration.

Other indicators are fairly robust as well. The layoff rate continues to be reported near a record low of 1.1%. While inflation has been a little choppy because of energy hikes caused by the war in Iran, the job market has surpassed expectations.

What makes it all the more remarkable is that the job market has remained steady during Trump’s massive layoffs from the federal government and the redistribution of jobs due to the voluntary departure and forced deportation of 3 million illegal immigrants.

But that doesn’t mean everything is rosy for the Trump administration with 45 days before ballots go out in some states. The “low hire-low fire” economy, which offers people job security but little job mobility, has people anxious.

The Federal Reserve Bank of St. Louis says the labor market has gradually cooled since spring 2021, as unemployment has hovered near 4%.

The Fed describes 4% unemployment as consistent with its goal of full employment.

“The relatively on-track unemployment rate, however, does not reveal the increasingly difficult hiring landscape that unemployed and underemployed people face,” the Fed authors wrote.

That’s one reason Trump has been railing against the Federal Reserve Open Market Committee for keeping interest rates high.

One of the few policy tools available to the federal government to speed job creation is interest rates. Lower interest rates create jobs, while higher interest rates slow job creation.

This year, the Fed has been unwilling to accommodate Trump with lower rates, which the administration said is solely due to politics.

“There’s a majority of people over at the Fed that are not necessarily going to be voting because they’re patriotic, but rather because they want to get Trump,” Director of the White House’s National Economic Council Kevin Hassett told Fox News.

In late July, the FOMC voted 9-3 to keep interest rates unchanged.

Critics point out that the FOMC voted to lower interest rates before the general election in the fall of 2024 when Biden was president, even though core inflation was higher than it is today. The Fed lowered interest rates from 5.5% to 4.75% between Sept. 1-Nov. 7, 2024.

For this year’s midterms, the mediocre economic results are reflecting poorly on the GOP, according to voters. In a recent Reuters/Ipsos survey, 37% of registered voters picked Democrats to manage the U.S. economy, compared with 36% who picked Republicans, a sharp turnaround from previous polls.

Still, the congressional map is difficult for Democrats, who were once expecting a blue wave victory but have watched that expectation dim somewhat.

As much as voters are disenchanted with Trump, there’s still more disenchantment with Democrats. Recent surveys show that only 39% of voters approve of Trump.

But the Ipsos poll showed only 23% of voters approve of congressional Democrats.

And that disconnect may give Trump enough support to squeak by.

Professors Andrew Gelman and Christopher Wlezien argued before the 2022 midterms that elections aren’t decided in a vacuum based on the economy or the incumbent.

“Elections are not just referenda on the incumbent; the alternative also matters,” they wrote.

Biden’s approval rating in November 2022 was 40%, according to Gallup.

A red wave widely expected based on the poor economy and poor polling never materialized.

The professors correctly predicted that “voters’ choices in those contests still matter when they go to the polls,” noting, “some of the candidates Republicans are putting up may not be best positioned to win.”

The GOP did pick up the majority. But it wasn’t the wave.

Just a few days ago, a suppressed version of the Democratic National Committee’s autopsy on the 2024 election admitted those directing the campaign were out of touch with the electorate’s mood and the practical realities confronting most Americans.

Today, top Democrats may still be struggling, with some prominent liberals expressing bafflement about the loss, indicating perhaps they don’t simply have a problem with quality candidates, but a problem with quality ideas.

“The main lesson of 2024 is that somehow, unbelievably enough,” Matt Bennett, who runs a Democrat think tank, told the New York Times, “voters concluded that we were the radicals.”

This comes into focus as progressive Democrats prevail in some of this year’s primaries, pushing the party further left. That lurch could bring pushback, particularly from moderate voters.

“I think those values are just so antithetical to what, especially Americans in the heartland of this country believe,” Evan Barker, a former Democratic operative and author of Nothing Left: Confessions of a Democratic Operative, said on a recent podcast. “Do not underestimate how much the Christian nation of America is. It does have a kind of primal reaction to stuff like that.”