Jobs Report Adds to Economic Momentum for Harris

Jobs Report Adds to Economic Momentum for Harris

Recent reports have shown inflation slowing and the economy growing at a robust clip. The Fed has also cut interest rates, bringing mortgage rates down.

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By Jim Tankersley

Vice President Kamala Harris probably could not have hoped for a better run of pre-election economic data than what the United States has enjoyed over the last month.

In recent weeks, key inflation indicators have fallen close to the Federal Reserve’s 2 percent target rate, after years of running hot under Ms. Harris and President Biden. Federal Reserve officials cut interest rates by a half percentage point, immediately bringing mortgage rates to their lowest level in two years. The Commerce Department confirmed that the economy has grown at a robust 3 percent clip over the last year, after adjusting for rising prices. The Census Bureau reported that the typical household’s inflation-adjusted income jumped in 2023.

Those numbers had encouraged Democrats, including policymakers in the White House and close to Ms. Harris’s campaign team. Recent polls have shown Ms. Harris closing the gap, or pulling even, with former President Donald J. Trump on the question of who can best handle the economy and inflation.

But it was Friday’s employment report — 254,000 jobs gained, with wages growing faster than prices — that appeared to give Harris boosters a particularly large dose of confidence. The report came less than a day after striking dockworkers agreed to return to work through the end of the year, avoiding what could have been a major economic disruption with a month to go before the election.

“The combination of this great job market and easing inflation is generating solid real wage and income gains,” said Jared Bernstein, the chairman of the White House Council of Economic Advisers. “While those continue to power this expansion forward, we’re also seeing record investment in key sectors, an entrepreneurial boom and gains in worker bargaining power to help ensure that workers get their fair share of all this growth.”

Even Mr. Biden, who has attempted to strike a balance between cheering the economy’s performance and acknowledging the struggles created by years of fast-rising prices, sounded more upbeat than normal on Friday. He made a surprise appearance in the White House briefing room to celebrate the jobs report and the end of the port strike, which the president and his aides helped broker.

“The past two days, we’ve gotten some very good news about the American economy,” Mr. Biden said.

Independent economists were less cheerful. Several of them acknowledged the strong numbers but warned that they could be illusory, and that the Fed may need to continue to cut interest rates in the months to come to keep unemployment from rising.

“The September jobs report is unambiguously strong,” James Knightley, the chief international economist at ING, wrote in a research note. But he immediately warned that other indicators, including Americans’ personal assessments that the job market is worsening, cloud the picture. “We feel that the risks remain skewed towards weaker growth.”

Geopolitical events could further cloud the next month in the economy. The biggest risk is the rising price of oil, a direct result of escalating war in the Middle East and its potential to crimp the flow of crude to global markets. Oil prices have jumped about 10 percent since late September as Israel has struck targets in Lebanon, including a surge on Thursday after Mr. Biden suggested Israel was planning to strike Iran’s oil facilities.

Still, prices remain well below their post-pandemic highs following Russia’s invasion of Ukraine. American gasoline was selling for $3.18 a gallon on average nationwide on Friday, according to AAA. That’s down from $3.31 a gallon a month ago and $3.79 a gallon a year ago. Democrats have closely tracked gas prices throughout Mr. Biden’s presidency and remain wary of a spike heading into the election.

Manufacturing jobs, too, continue to muddle the story Ms. Harris and Mr. Biden would love to tell about the economy on their watch. The sector is struggling now in almost exactly the same way it did on the eve of the pandemic. Factories had a net loss of jobs in September, and the sector is down about 50,000 jobs from its high, in January.

Ms. Harris’s running mate, Gov. Tim Walz of Minnesota, tried to attack Mr. Trump for the sector’s past weakness during this week’s vice-presidential debate. Mr. Walz declared that “we were already, before Covid, in a manufacturing recession” under Mr. Trump. The suggestion was that the sector was beginning to lose ground before the pandemic, and before Mr. Biden took office.

Under Mr. Trump, factory employment had a similar fall — roughly 50,000 jobs were lost from a January 2019 high through February 2020, before Covid-19 shut down the American economy.

Republicans attacked Ms. Harris on factory jobs issue on Friday. “Kamala Harris and Joe Biden have built back broke, losing 34,000 manufacturing jobs in just the past two months,” Karoline Leavitt, a spokeswoman for Mr. Trump, said in response to the jobs report.

Still, the recent run of strong data has helped reinforce the fact that the Biden-Harris economy has time and again defied forecasters’ expectations when it comes to growth and job gains.

Republicans and many Wall Street economists have repeatedly warned of imminent recession during Mr. Biden’s term. Instead, Mr. Biden has compiled the strongest real average economic growth for any president since Bill Clinton in his second term. He has overseen the lowest average unemployment rate for any president since Lyndon B. Johnson.

Mr. Biden and Ms. Harris have also seen consumer prices rise faster on their watch than any administration in a generation. Polls show voters remain upset about that inflation surge and bitter about the higher cost of food, housing and other staples.

That is why Democrats, including Mr. Biden, still attach caveats to their celebrations over good economic news. Mr. Biden told reporters in the briefing that his administration would continue to push additional proposals to bring down housing prices and the cost of prescription drugs, and that the federal government now faces the large unexpected costs of rebuilding from Hurricane Helene.

“We’ve got more work to do,” he said.