The NPR Politics Podcast - Inflation is up, job growth is flat, and voters don’t like it

Episode Date: May 14, 2026

In the last week, we’ve gotten seemingly conflicting economic data — inflation is up, consumer spending is up slightly and the job market is holding steady. We discuss what to make of it, how voters are feeling, and what politicians are saying about it. This episode: voting correspondent Miles Parks, financial correspondent Maria Aspan, and senior political editor and correspondent Domenico Montanaro.This podcast was produced by Casey Morell and Bria Suggs, and edited by Rachel Baye.Our executive producer is Muthoni Muturi.Listen to every episode of the NPR Politics Podcast sponsor-free, unlock access to bonus episodes with more from the NPR Politics team, and support public media when you sign up for The NPR Politics Podcast+ at plus.npr.org/politics.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

Hey, it's Miles. A quick word before we get started today. If the NPR Politics Podcast is part of your daily ritual, make it official on the NPR app. You'll hear about every episode the moment we have it ready. Just turn on notifications and we'll handle the rest. See you there. Download the NPR app today. Okay, here's the show. Hey there. It's the NPR Politics podcast. I'm Miles Parks. I cover voting. And I'm Domenico Montanaro, senior political editor and correspondent. And NPR finance correspondent, Maria Aspen is also here with us. Hi, Maria. Hey there. Great to be with you in person. Yeah, it is awesome to have you in studio all the way down from New York. And today, we've actually brought you in to untangle some pretty complicated economic data because I feel like the U.S. economy is giving me personally mixed messages. So where can we start here? Walk us through what we've seen in the economy right now. It's kind of a mess. Mixed messages is a good description of it. I mean, we've seen unemployment holding pretty steady. Companies have added. jobs the last two months. And so, you know, the employment picture is okay. It's not fantastic. Consumer spending is okay. This morning we saw retail sales for April rose. Now, they only rose 0.5 percent down from a higher increase in March. But spending is still up. We're towards the

end of a quarterly earning season where big companies unveil their corporate report cards and They're, you know, blowing past profit expectations. And that is helping out the stock market, which we've seen hitting record highs. Of course, the obligatory disclaimer that the stock market is not the economy, but it is a good proxy for how the big companies that reflect the economy are doing. And yet, at the same point. I knew the boat was coming here at some point, but yeah. So we're in the middle of a war that has created an energy crisis that is driving. up oil and gas and fuel prices, which is driving up consumer prices. We just saw that inflation, which was seeming closer to coming under control, it's now heating up to its highest level in

almost three years. That is a wrong direction. And look, we're all feeling it. I mean, obviously at the gas pump, airfares are up about 20 percent from a year earlier. As, you know, if you've tried to book a airplane take. for a summer vacation, you've probably noticed. And of course, when oil and fuel prices go up, it's not just gas. It's also that affects the prices for companies that are shipping and trucking. And pretty much that affects the prices for pretty much everything they make. So we haven't seen the full impact of how these prices and how this inflation is going to affect the broader economy. But it's not great. So I want to focus on this inflation number just for a second.

highest number that we've seen in three years. Is this just the war in Iran that is driving prices up or is there something else going on? Well, remember a year ago, Liberation Day, President Trump's tariffs? I mean, we're now at over a year of seeing increased taxes, essentially, on pretty much everything the U.S. imports. Now, many of those tariffs have been struck down by courts, but tariffs are still overall higher than they were a year ago before Liberation Day. So that affected inflation. And then more recently, the war is what's pricking inflation right now. But inflation was still being fueled before the war in Iran. So then politically, Domenico, you know, President Trump, before he left for China, was asked explicitly, to what extent are Americans financial situations motivating you to make a deal in Iran? And here's what he said.

Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear. weapon. I don't think about American financial situation. I don't think about anybody. I think about one thing. We cannot let Iran have a nuclear weapon. That's all. I feel like it's kind of striking to hear a U.S. President say, I don't think about Americans financial situations at all. What do you make of that? I mean, politically, it's a head slapper because the number one political axiom has been that it's the economy stupid, right? And everyone knows that Trump was largely elected because of the economy. A lot of these crossover groups, Latinos, younger voters. A lot of them said their top issue was the economy

and prices. They were upset with high inflation in 2022 and what they had then tagged to the Biden administration as not doing a good enough job on the economy. So they crossed over to say, you know, this was somebody who had a high approval rating in his first term when it came to the economy. And they went and voted for Trump because they were upset with what was happening with the current administration not being able to really affect prices in the way that they wanted them to. But now you've seen Trump, I have to say, he's signaled many times since getting reelected here for the second term that he never thought that the economy was the thing that got him elected. He said that immigration, he always thought, was more important. And he made a point to

almost say this repeatedly many times after he was reelected here, you know, said that, what are you going to do? You know, people say the price of apples is higher, price of groceries is higher. But You know, you say it, but then what can you do? And in some respects, there is an old, you know, belief and understanding and idea in politics that presidents get more blame and credit on the economy than they deserve. But when it comes to Trump, he has taken active measures to make the economy make prices worse when you think about tariffs going into effect and then engaging in this war with Iran that has seen gas prices go up like a rocket. And they're certainly not going to come down quickly, even if the war were to end tomorrow, as have been through at least the end of this year, potentially even into 2028 as to when gas prices might come back down to pre-war level. So him saying that the war is not, you know, something that when he thinks about it, he doesn't take into consideration people's financial situations. You know, I think a lot of people are going to feel like that's out of touch and that it may not stick to him because he's not running for anything else, but it really is

going to put a lot of Republicans who are running in swing districts in really sticky situations. And Democrats now have an advantage on the economy when it comes to which party people trust to handle the economy more. Recent CNN poll, for example, had Democrats leading by two points on this compared to Republicans. That may not sound like a big advantage, but Republicans have had an advantage on this question for years. And for Democrats to now be able to turn that around is a huge advantage when you're thinking about this as the top issue in the campaign. And when it comes to the cost of living, obviously a big, big, big. factor in people's ability to be able to afford things and whether they're going to vote and how. Democrats have a nine point advantage.

Well, I also wonder, I mean, aren't his approval ratings at near or all-time lows at this point? I wonder how much of that is connected to both the economy, but then also the way he's messaging about it. I mean, his approval ratings have been in the 30s when it comes to the economy, 35 percent in the last NPR, PBS News, Maris poll. That is unheard of when it comes to Trump's first term. His first term, he was routinely above 50% in his handling of the economy. People didn't like his tweets. They didn't like some of the ways he went about things. They didn't like some of his culture war issues.

But they always felt economically he was getting pretty high marks. This term, absolutely not. It's below almost everything else. And even if we take politics out of it, I mean, consumers feel terrible about the economy. The University of Michigan says that consumer sentiment is at an all-time low. So even if you don't look at how. voters feel about Trump. I mean, people do not feel good about the economy right now. Well, one of the things that I've been confused about Maria, though, is that unemployment is

pretty low, right? Compared to historical numbers, can you dig into that a little bit in terms of what the job market looks like right now? Yeah, it is low and it has been low. It's at about 4.3 percent now, and that's the level it's been hovering at. You've heard, you've probably heard these terms like jobless growth or low, higher, low fire jobs market. So unemployment may not be spiking, but it's not a very dynamic job market. And, you know, it's not super robust if you're looking for a new job. There's also just, and I think we're seeing this play into some of the consumer sentiment, there's so much uncertainty right now, not only about prices, but also about what's ahead in unemployment, especially regarding artificial intelligence. Because AI is kind of

driving the economy right now. Big companies are spending gobs of money on the so-called infrastructure. to build up artificial intelligence, whether that's building data centers or buying the Nvidia computer chips that are powering AI. And that's also making the share prices of big tech companies soar, which is part of why we're seeing the stock market hit so many highs. All of that said, there's this open question about what the growth of AI means for jobs over the long term. there's not overall data to show that AI is contributing to unemployment yet, but you have seen some huge, dramatic announcements by tech companies saying they're laying off workers to spend more money on AI. In fact, Cisco said exactly that. They're laying off about fewer than 4,000 workers or about 5% of

their workforce, specifically to pivot more to AI. And their share price is up like 14% right now midday. Yeah, and it's not like AI is doing those jobs. It's just that they're spending so much money on trying to invest in the AI for future potential earnings that they're going in this direction. And it feels like everything on Wall Street is seemingly, in the last two years anyway, has become very AI focused. And we've also then seen where on the grassroots, people are moving more toward being opposed to AI. One of the things in our last survey that didn't get a lot of attention because there were so many other important things in that survey. We did ask a. question about whether or not people thought that AI would eliminate more jobs than it creates or whether or not it would create more jobs than it eliminates. Eight in ten said they think AI will eliminate more jobs than it creates. And that was an increase from last year where about two-thirds said that, 67%. So we're seeing, you know, data centers become more unpopular and being more of an issue on the campaign trail. I think going to be a major thing in 2028. And we're seeing people now move more against saying, you know, whether or not they think AI is good for regular people.

And yet the wealthier people, companies, they're benefiting from these AI investments. And we've seen income inequality become a bigger gap over the years. And this, I think, is another thing where I think a lot of people feel like it's going to just fuel that. Right. If you're invested in the stock market, you are benefiting from the AI boom because the AI boom is what you're driving in the stock market. but it's, you know, it is a large portion of Americans who are invested in the stock market, at least through their 401ks and other retirement funds. I think it's about 60 percent. But that still leaves about 40 percent of Americans who are not. And we're continuing to see this sort of divide between wealthier consumers who are insulated from some of the increase in prices and the middle class and lower income consumers who can't afford to pay more for things when everything's going up.

Well, it makes so much sense to me. that this anxiety, just because AI hasn't really been shown to take jobs completely from people yet, that everyone, I mean, we feel it in the media, don't we? In terms of like, I'm like, am I going to have a job in five years and 10 years? I don't know. I think everyone in every industry is probably feeling some level of anxiety about that. Better keep that original reporting up, Miles. All right. Let's take quick break and more on all of this in just a moment. And we're back. So, Domenico, there seems to be a little bit of a contradiction between, how Americans feel about the economy and how President Trump is talking about it. And I want to dig into how this is going to manifest this year on the midterms. How do you think Republican candidates are going to engage with the economy? And obviously, this is somewhat connected to engaging with the war in Iran. But how do you think Republican candidates are going to engage with all this? Look, when it comes to the economy, it is the top issue for people and has been all along. Doesn't matter what else is going on in news, whether other chaos that people are fired up about. It's been prices.

affordability, no doubt about it, the top thing. And I think that as much as President Trump has been Teflon, especially with his base, I think that for a lot of these swing district Republicans, they're feeling like Velcro because they are stuck with this. And they are trying to come up with a message that's different from what the president's talking about. I think a lot of them would just say, oh, gosh, I wish he would really help me out here and not say things like we featured earlier in our podcast about saying that it doesn't really consider people's financial situations when you're thinking about Iran because a lot of these Republicans who are in these moderate districts, they support the war in Iran. They support this effort by the president,

but they're trying to walk this line to also say that they care about their financial situations and are trying to do specific things about it. I think about somebody like Ryan McKenzie, who's a congressman in Pennsylvania, a seventh congressional district. And he's in in one of the more vulnerable districts. He's been talking about affordability quite significantly. He's been talking about this tax policy that he advocates for increasing child tax credit. We're talking about housing initiatives and introducing legislation to provide some tax relief for first-time homebuyers. But it's a hard message to break through when the person who you're most closely associated with at the top of your ticket has an approval rating in the 30s on the economy.

I mean, do you think, Maria, the consumer sentiment is going to shoot back up if President Trump is able to, find some graceful exit in Iran? Well, as Domenico was saying earlier, just, you know, if we get out of Iran tomorrow, we're not going to see gas prices go back down. Things have been set in motion that are going to take a long time for the economy to recover from. And then I guess the flip side of my question to Domenico about how Republicans are going to engage with the economy is for this to be a problem for them. I do think Democrats need to successfully message on it. And this is not something they successfully messaged on in 2024, as we have talked ad nauseum about, considering Harris was on the ticket and the Biden administration, inflation seemed to be one of their biggest problems. Do you think they're figuring this out in terms of how to talk about the economy and inflation effectively?

What's a different world, Miles? I mean, think about who you just talked about. You said Biden and Harris when they were in office, right? Who's in office now? Trump, right? And that is the only thing that matters when it comes to politics. You know, anger is the biggest motivating factor in politics. not policy initiatives, not deep dives and white papers and rollouts. What's important is being able to say, that guy's causing you problems and I'm going to help try to fix it. And here are a couple solutions. There are a couple ideas. And they'll have them, right? They don't get the kind of attention we're all talking about.

But those aren't the things that motivate people. President Trump has a 51% strongly disapprove rating in our latest NPR PBS News, Maris poll. That kind of intensity of opposition is all you have to run on, especially in swing districts. Devil's advocate here, though. I feel like I wonder whether that rings kind of hollow to some voters who are basically looking at Democrats messaging completely on inflation this year and say, two years ago,

weren't you telling me like not to worry about this essentially? Now it is the top of your ticket or the top concern now that the other person's in the White House. I don't know. Does that raise any issues for voters? I think that's probably a little reductive. I think that there were definitely specifics and policies that those swing district Democrats ran on, like McKenzie is running on in his swing district as a Republican, it just rings hollow when you have the person who is in charge not necessarily getting done things. And the thing is, again, on the economy, it's really, really difficult for a president to impact or to affect the economy in a positive way. He certainly can do so in a negative way.

And I think that's a difference here between what we saw in the last administration and with what Trump has done. It's easy for Democrats to say these tariffs and this Iran war are two things a president has control over and has made your life more difficult. So let's roll that back and try a few other things if we can get Republicans on board to try to, you know, alleviate some of your pain. Republicans have tried to say, hey, the one big beautiful bill, the OBBBB, as they call it, they passed tax cuts. They had a whole tax cut rollout. didn't work as far as breaking through to improve Trump's economic numbers, just like Bidenomics didn't really break through at all because people get angry with the person who's in charge and they say, hey, what have you done? Not necessarily what you're going to do.

I want to switch gears here just for a second to also talk about some other big economy news is that we are getting a new chairman of the Fed. Kevin Warsh has been confirmed by the Senate to take over for Jerome Powell. And Marie, I'm hoping you can just tell us a little bit about Warsh and how he's going to lead the central bank? So Warsh is Trump's guy. Trump nominated him and picked him with the hopes that Warsh would do what Jerome Powell has not done and lead the Fed to lower interest rates faster and more than the Fed has done. Now, remember, Powell was also Trump's guy. But in the past often forgotten, though, I feel like he was nominated during Trump's first term.

Correct. Yeah. But Trump has really turned on him in the past since getting back into office. And even before, he's called for Powell's firing. He's publicly berated Powell. His Justice Department launched and then recently dropped a criminal probe into both the Fed and Powell. And this is all because Trump wants the Fed to cut interest rates. Lowering or raising interest rates is basically the Fed's primary tool for responding to the economy. If unemployment is spiking, the idea is the Fed lowers interest rates to make it easier for companies to borrow money and invest and then hire more people. If inflation is heating up, though the Fed wants to raise rates to try to bring inflation back under control. And inflation, even before we saw the most recent inflation numbers, inflation has been above where the Fed wants it. Now, there was an idea that the Fed was kind of on a glide path to more rate cuts recently. And I think the Trump's hope and the general expectation was Warsh will come in, take over from Powell, and there will be more cuts. That said, Warsh has said he will be independent. And we're seeing both investors and even some Fed officials start to say, actually, given the economic data, rate hikes might eventually be on the table later this year.

Wow, I can almost, if that is the case, our experts worried that we could see some. similar pressure from Trump on Warsh and that Warsh could respond differently? There was some concern about that, especially before Warsh was named. There was kind of this public bakeoff over who Trump's nominee would be. And Warsh was seen as a more establishment pick. So investors and economists generally have been feeling more reassured that he will continue to stand up for the independence of the Fed. Although, of course, it is an open question. It is, it is important to note, though, the Fed chair, whether it's Powell or Warsh, doesn't get to set rates on his own. It's a 12-member committee. And Powell is stepping down tomorrow officially as chair of the Federal Reserve Board of Governors. He'll still be on the board. He'll still get a say. With inflation outpacing wages, right, for the first time in quite some time, it's going to be really hard for a Fed chair to justify cutting rates and to build consensus. on that committee. Remember, this is going to be his legacy. I mean, if the economy tanks and goes

into recession because the Fed decided to cut, cut, cut, that's going to be his name on that, not necessarily whether or not he continues to have favor with President Trump. That's going to be his legacy. Although we should also point out that this is a very fraught time for the Fed. And I believe Warsh was confirmed pretty much, almost entirely along party lines. And it was the narrowest. confirmation for a Fed chair since the Senate started getting a say in 1977. So it's, I don't think all of the worries about the Fed's independence are over and done with. All right. Well, we can leave it there for today.

Maria, thanks again so much for joining us. And great to see you in person. Great to be here in person. Lovely to join you both. I'm Miles Parks. I cover voting. And I'm Domenico Montanaro, Senior Political Editor and Corresponding. And thank you for listening to the NPR Politics Podcast.

Thank you.