6 minPolitics
Voters in key states say economy will shape November midterm votes
Voter views on the economy could decide which party controls Congress in November, and state and local races may matter as much as federal contests for the economy's direction.
Voters' feelings about the economy could be the deciding factor in which party wins control of Congress in November. NBC News correspondent Hallie Jackson traveled to several key states to ask voters how they assess the economy in their own words, offering a snapshot of the concerns that candidates are likely to face as the midterm campaign enters its final stretch.
The economic mood on the ground is not the only factor shaping the contest. Analysis published by Fortune argues that the outcome of lower-profile state and local races may carry as much weight for the economy as the battle for the House and Senate. Data centers have emerged as a national issue in this cycle, and federal candidates have made them a central theme of their campaigns. Yet state and local officials hold more direct sway over data center construction and energy infrastructure, which means the winners of those races may influence the economy's future in significant ways.
The stakes are large. Hyperscale technology companies have been spending hundreds of billions of dollars a year on infrastructure, with forecasts for 2027 topping $1 trillion. JPMorgan has estimated that AI-related investment accounted for about one-fifth of GDP growth over the past year, and analysts at ING believe AI will account for a third of growth in 2026. With Election Day just over a week away and early voting already under way in many states, the stock market has sold off in recent days amid fears that the AI boom could go bust.
Thierry Wizman, global FX and rates strategist at Macquarie, wrote in a note that if the stock market slumps further, it would be because a «blue wave» at the state and local levels brings in lawmakers opposed to data centers. «For the direction of the U.S. economy, the composition and direction of governance at the state level may matter more than whether the Democrats ‘win’ the House or the Senate,» he said.
That dynamic was visible this week in Loudoun County, Virginia, where Amazon canceled a plan to build data centers after reaching an agreement with local officials amid widespread resident opposition. Amazon Web Services had bought the property for the project in February for $427 million, a purchase that reportedly caught county leaders off guard as they grew uneasy about the rapid expansion of data centers in the area. Amazon said it will not build data centers on the land and will repurpose most of it for mixed-use and residential development. The company also pledged 25 acres for a community arts center and recreational facility, along with $5 million for a housing fund.
Texas, another hot spot for AI industry growth, shows how political positions can shift. Republican Gov. Greg Abbott, once a booster of data centers, has grown skeptical as he faces a tough re-election race against Democratic state representative Gina Hinojosa.
Michael Pearce, chief U.S. economist at Oxford Economics, has argued that midterm races for state capitals and town halls pose a bigger risk to the data center buildout than developments in Washington, D.C. The Trump administration has already used regulations and executive orders to facilitate construction, while any comprehensive legislation in Congress would move slowly. Local officials, by contrast, can act more quickly through moratoriums, environmental reviews, and delays in connecting new data centers to the power grid, Pearce said in a note on Thursday. He identified the key midterm races for data centers as those in Texas, the Carolinas, and Midwest states including Ohio, Illinois, and Wisconsin.
Pearce also noted that the results could shape the 2028 presidential race. «If this year's elections show that an anti-data center stance wins political contests, it could put data center regulation at the heart of the 2028 campaign,» he said. He added that data center construction shifted sharply higher in the middle of the year, possibly in anticipation of a more hostile political climate. Developers may ease local opposition by demonstrating that a facility will lower local tax bills or fund schools and roads.
Even if lawmakers pass a moratorium on new data centers, the economic effect would not be immediate. Pearce estimated that most of the economic value comes from the computing equipment inside the facilities, and that spending on that equipment lags construction by six to eight quarters. «This year's surge will keep supporting business investment over the next couple of years, whatever happens on the ground,» he predicted.
Daniel Skelly, a portfolio manager at Morgan Stanley Wealth Management, has suggested that a slowdown in spending could be beneficial for the AI sector over the long run. In a note Wednesday, he said the sector still enjoys solid growth and strong earnings despite recent volatility, and that the long-term investment cycle remains intact. «Also, ongoing power deficits, a shortage of people to build data centers, and political pushback against them may elongate the cycle and lower the odds of a blow-off top,» Skelly said.
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