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A version of this story appeared in CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free here. It’s the circle of political life: Now, as in 1992 when Bill Clinton was trying to unseat George H.W. Bush, what ails the electorate can be boiled down to a soundbite: It is, in fact, the economy, stupid. Democrats trounced Republicans on Tuesday in three key races with little in common apart from one issue — affordability. It’s the same problem that propelled President Donald Trump to a second term. And the same problem that Trump, who promised lower prices on “Day One,” has let fester as he carries out an economic agenda of tariffs, tax cuts and deportations that are, unavoidably, inflationary. Elections in Virginia, New Jersey and New York City reflected an electorate that is financially exhausted after five years of inflation that peaked in 2022. Although prices have stopped rising rapidly, they have not come down, contrary to Trump’s repeated lie that prices “are down” and that there is “no inflation.” Ideologically and culturally, Tuesday’s mayoral and gubernatorial races couldn’t be more different, but across those closely watched races, voters called economic issues – taxes, cost of living or the economy as a whole – their top concern, CNN exit polling found. Only voters in Virginia saw their state’s economy as excellent or good, while those in California, New York City and New Jersey took a more pessimistic view. At the same time, Republicans and independents didn’t get any help from the president’s decision to bulldoze the East Wing to build a $300 million ballroom, refurbish the Lincoln bathroom with marble and gold, or host a “Great Gatsby”-themed party at his private Florida club last weekend while refusing to fully fund vital food-assistance benefits during the shutdown. “It’s becoming obvious that Trump cannot relate to the voters – and vice versa,” Greg Valliere, chief US policy strategist at AGF Investments, told CNN on Wednesday. “People can see with their own eyes what is going on with prices.” Valliere said there is a sense that Trump is “oblivious to the anxiety that so many Americans are feeling.” Those optics gave Democrats, particularly the moderate gubernatorial candidates in New Jersey and Virginia, room to run on the economy while largely steering clear of Trump-bashing. Moody’s Analytics found the typical US household is spending $208 more per month now than it was in September 2024 to buy the same goods and services because prices have snowballed. And when measured against early 2021 prices, families must spend $1,043 more per month to buy the same stuff. Surging electricity in New Jersey “I heard again and again — ‘it’s just too expensive,’ so I focused on those key issues,” New Jersey Governor-elect Mikie Sherrill told CNN’s John Berman on Wednesday. “I’m going to quickly move to address those key issues, but at the same time, forcefully push back against these economic hits that we’re seeing coming from Washington.” Energy is also re-emerging as a hot-button issue for voters. Trump promised last summer to swiftly cut electricity prices in half if voters returned him to the White House. Instead, electricity prices are rising unusually fast. While gas is cheaper than a year ago, US residential electricity was 6% more expensive in August year-over-year, according to the most recent federal data. That’s twice the pace of overall inflation. Voters in Virginia are getting hit with even bigger price hikes, with residential electricity prices there surging 13% between August 2024 and August 2025. A major part of the problem comes from big Trump backers in Big Tech. Long-stable demand for power is suddenly rising fast as Big Tech scrambles to build massive data centers to support the artificial intelligence boom. And Virginia is ground zero for the buildout of those power-hungry data centers. In New Jersey, which has among the highest power bills in the US, electricity prices have spiked 21% — a fact that pushed many voters toward Sherrill, who vowed to declare a state of emergency on energy prices. According to exit polls, most New Jersey voters who call the economy or health care the top issue in the state backed Sherrill, while voters who are more focused on taxes or immigration supported her opponent, Republican Jack Ciattarelli. DC turmoil hits Virginia Economic turmoil stemming from Washington, DC — including DOGE layoffs and the longest-ever government shutdown — became a central concern for the hundreds of thousands of federal employees who live in Virginia. That insecurity compounded voters’ economic anxieties, helping Governor-elect Abigail Spanberger win with her message of “pragmatism over partisanship,” as she referred to it in her victory speech Tuesday night. “You all chose leadership that will focus relentlessly on what matters most: lowering costs, keeping our communities safe and strengthening our economy for every Virginian.” In New York, meanwhile, Mayor-elect Zohran Mamdani clinched his victory with an unrelenting focus on making one of the most notoriously expensive cities in the world more affordable for the working class, particularly when it comes to housing. In his victory speech, Mamdani reiterated his promise to tackle the cost-of-living crisis by freezing rent for more than 2 million residents, make city buses free and fund universal child care by raising taxes for millionaires and corporations. Exit polling showed that message discipline paid off: Mamdani voters overwhelmingly called cost of living the top issue facing the city, with 7 in 10 saying the cost of housing where they live is a major problem, compared to just about a third who say crime is a major problem. Now comes the hard part, as Mamdani himself stated on Wednesday.
