The Economy

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Market mindset unravels

Illustration: Sarah Grillo/Axios. Stock: Getty Images

American political leaders on the left and right are rebelling against the market-first consensus that dominated Washington for four decades. Why it matters: The result is one of the biggest shifts in U.S. economic policy since the Reagan revolution, overturning decades of orthodoxy on trade, manufacturing, housing, health care and corporate power, Axios' Courtenay Brown and Neil Irwin write. Between the lines: The shared skepticism of the old economic consensus masks vastly different visions for what comes next. 🐘 On the right: "American economic policy on the right is now much more Alexander Hamilton than it is Milton Friedman," Vice President Vance told right-wing political commentator Michael Knowles last month. Translation: Vance believes the GOP's intellectual center of gravity is shifting away from free markets to a more interventionist government that promotes domestic industry. He joked that President Trump threatened to seize an AI company's equity and "no one protested." In practice, the pivot means that Trump has embraced tariffs and taken stakes in individual companies, among other policies. This week, the president celebrated Walmart's decision to lower prices and urged other retailers to follow suit. 🫏 On the left: Democratic socialists, including New York Mayor Zohran Mamdani, argue that government, not markets, should guarantee affordable housing, health care and other basic necessities. The movement is showing fresh political muscle following Mamdani's rise in New York, and a wave of DSA-backed victories in New York and Colorado that have establishment Democrats increasingly on edge. The new socialist candidates oppose the idea that markets should decide who gets health care, housing, child care or power at work — a close left-wing mirror image of Vance's belief that markets should serve broader social goals, not dictate them. The big picture: No single economic event explains the unraveling of the market-first consensus. Consider how slow-moving economic forces have built on each other: The China shock, the 2008 financial crisis, decades of soaring housing and health care costs, the pandemic and the inflation surge — all eroded confidence in the economic status quo. Social media amplified those shocks, giving Americans a window into how other people live, making wealth disparities, housing inequities and economic frustration feel more immediate and personal. 👀 Reality check: The shift is far from universal. Trump paired tariffs and industrial policy with traditional Republican priorities — including corporate tax cuts, deregulation and a generally business-friendly agenda. Even some democratic socialists have embraced supply-side ideas in housing, arguing that government should both build more homes and lower barriers to construction.

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• 🤑 Lower energy prices led to inflation's biggest monthly drop since April 2020 — but this latest report doesn't account for seesawing oil prices as the Iran war reignites. More from Emily Peck.

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📉 Jobless claims lowest since '69

Data: Department of Labor; Chart: Neil Irwin/Axios Only 187,000 people filed new unemployment benefit claims last week — the lowest number since September 1969, Axios' Courtenay Brown and Neil Irwin report. The labor force was much smaller then. Relative to the overall number of workers, this is easily the lowest number of jobless claims on record. 🤖 The big picture: There have been plenty of gloomy warnings about jobs, including worries that AI will lead to widespread layoffs. We appear to be far from that reality. 🧑‍💻 Yes, but: Younger workers are feeling the pinch of the low-hire, low-fire dynamic. Entry-level job postings were down 7.5% in May from a year earlier, Indeed says in a new report. The bottom line: If jobless claims stay low, economists may have to rethink the threat posed by AI and other factors. Go deeper.

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Making ends meet

A growing number of workers at some of the nation’s largest companies are relying on food stamps and Medicaid, a recent report found. The findings highlight the affordability challenges facing many American households.

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Immigration FAQ

Immigration is among the most important economic and political issues and a main topic of discourse and debate among policymakers and the public. But misperceptions persist about many fundamental aspects of this crucial topic.

https://www.epi.org/publication/immigration-faq/?

Social Security FAQ

Social Security turns 90 this year. Despite its popularity and exemplary record of never having missed a payment—even after the 9/11 terror attacks and Hurricane Katrina—misperceptions persist about many fundamental aspects of this universal program.

https://www.epi.org/publication/social-security-faq/?

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• 📈 The U.S. economy grew at a 1.5% annualized rate in the second quarter, capturing a three-month stretch shaped by the Middle East conflict and a surge in energy prices. That's slightly slower than the 1.8% growth that economists expected. More from Courtenay Brown.

 

US filings for jobless benefits rise to 197,000 last week, but layoffs remain historically low

The number of Americans applying for unemployment benefits rose last week but layoffs remain in the historically healthy range of the past few years. Read More.

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Unions are key to high-quality public education

Our recent report asks a bold question: What would the United States look like if we tripled union membership? We find a range of economic and social benefits—such as higher wages, greater access to health insurance, and a stronger democracy. This post examines another social good generated by unions: strong investment in public education.

https://www.epi.org/blog/unions-are-key-to-high-quality-public-education/?

The case for tripling union membership

Imagine union membership tripling in the United States. It may sound radical—if you’ve forgotten history. In fact, more than 1 in 3 private-sector workers belonged to a union in the 1950s. The results? Wages grew in tandem with the economy. The middle class thrived. Black-white wage gaps shrank. Broadly shared economic growth was a reality, not an aspiration. That’s because when workers have bargaining power, they win better wages, benefits, and working conditions. This report shines a light on what we stand to win if we rebuild union power.

https://www.epi.org/publication/the-case-for-tripling-union-membership-how-rebuilding-union-power-would-strengthen-workers-the-economy-and-our-democracy/?

 

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💰 Data du jour: Earnings bonanza

Illustration: Sarah Grillo/Axios

America's biggest companies are on a hot streak this earnings season: They're reporting double-digit profit growth in spite of high interest rates, higher energy prices and cautious consumer spending, the Financial Times reports ($). Stunning stat: S&P 500 companies are on track to report profits that are 47.4% higher than a year ago, according to FactSet. If that holds, it would mark the strongest quarter for corporate profit growth in five years — since the pandemic rebound. Nearly 90% of S&P 500 companies have reported profits that beat Wall Street's expectations.

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Mega-swings for mega-caps

Data: S&P Capital IQ, Wharton WRDS. Chart: Erin Davis/Axios SpaceX lost $773 billion in market capitalization from June to July, Axios' Emily Peck and Erin Davis report. That's the biggest month-to-month drop for any company dating back to 1970. Reality check: SpaceX's market cap is still relatively high, at $1.4 trillion. 🖼️ The big picture: This isn't simply about CEO Elon Musk. The stock market is in a mega-cap era, and it's dealing with lots of volatility. Thirteen U.S. public companies now have a market cap of $1 trillion or more, mostly in the tech sector: Apple, Amazon, Nvidia, etc. When the numbers are that big, so are the losses and gains. 🌊 What's next: SpaceX faces two big tests this week: reporting its first financials as a public company, and potentially coping with a flood of unlocked stock. Starting Thursday, SpaceX employees and some early investors will be able to sell 911.5 million shares. That's 12% of the total — and more than the 640 million shares currently available for trading. Go deeper.

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US filings for jobless benefits rise to 199,000 last week, but layoffs remain historically low

The number of Americans applying for unemployment benefits rose last week but layoffs remain in the historically healthy range of the past few years. Read More.

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📉 America's employers unexpectedly shed 23,000 jobs in July, while the unemployment rate ticked down to 4.1%. The report hints at bigger cracks in the labor market than previously known. Go deeper.

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A different Fed view

Illustration: Brendan Lynch/Axios

Axios CEO Jim VandeHei highlights what he sees as the most overlooked part of the Fed's Warsh era so far: When Mike and I are curious about the "real economy," we talk to sources at big-box stores for a read on real-time sales trends or friends at super regional banks to gauge the mood and money movement. To us, that's the real world and real data, imperfect but less imperfect than dated Bureau of Labor Statistics surveys built for a different time and economy. That's why we think the most interesting thing to watch long-term at the Fed is the seemingly boring data task force Warsh appointed last month to improve the "quality and timeliness of real economic signals that inform the Federal Reserve's policy judgments." The members: Harvard economics professor Raj Chetty, former Walmart CEO Doug McMillon and University of Chicago economics professor emeritus Kevin Murphy. The big picture: AI should surely help aggregate and better analyze more real-time data feeds to help policymakers make better decisions. If not, AI will be a total flop. Imagine a parallel Fed that uses more fine-tuned, real-time data feeds, analyzed without economic worldview bias or personal interest of Fed governors. The bottom line: We've known Warsh for years, and his interest in AI and rethinking data is real and intense. We'd be surprised if the ultimate manifestation of his "new chapter" isn't deeply infused with the work of McMillon & Co.

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More Americans are falling behind on payments

More Americans are falling behind on home and car loans than at any point in the past decade, new federal data shows. Late mortgage payments are at their highest level since 2015, while serious auto loan delinquencies are the highest since 2010. At the same time, wealthier Americans keep spending, and the AI boom has fueled stocks and delivered big gains for investors. But years of elevated inflation have pushed living costs up for most US households. Hiring has also slowed across much of the economy and elevated gas prices due to the Iran war are now causing inflation to outpace wage gains. Today’s July inflation report could offer a clearer picture of whether that pressure is easing.

+ Read more: Mortgage delinquency rates are on the rise

+ Analysis: Is the K-shaped economy unraveling?

+ USAFacts: What is the current inflation rate in the US?

Editor’s note: CNN has partnered with the not-for-profit USAFacts to share government data and insights that we believe are relevant to our audience.   Inflation slows but prices remain elevated as Iran war and spending on AI push up prices WASHINGTON (AP) — U.S. inflation declined slightly last month as the cost of gas and groceries slipped, though prices are still rising more quickly than before the Iran war, posing challenges for the White House as the midterm elections near. https://apnews.com/article/consumer-prices-inflation-fed-interest-rates-150e179a6c6b3182ba05cedf0188394b?

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US retail sales slump unexpectedly and sharply after a summer tax-refund boost fades

NEW YORK (AP) — After splurging on the World Cup and Amazon Prime Day sales, Americans unexpectedly cut their spending in July by the biggest amount in more than a year.

https://apnews.com/article/retail-inflation-consumer-sentiment-economy-3e2bc5807d7396b8e6c5f599941cb2a9?

• 🛍️ Retail sales hit an air pocket last month, falling 0.6% in July in what was the weakest performance in more than a year and well below the gain analysts expected, Axios' Neil Irwin reports.

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🤖 Women are missing out on the AI jobs boom

Data: LinkedIn. Table: Danielle Alberti/Axios Women made up just over a quarter of U.S. hires for AI roles last year — compared with half of new hires in non-AI occupations, Axios' Emily Peck writes from LinkedIn data out this morning. Men accounted for 74% and women 26% of hires for AI roles in 2025. The highest-paying roles typically have higher percentages of men. Keep reading ...