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The Economy Moves to Center Stage in the Election
Inflation is cooling but hiring is slowing as Kamala Harris and Donald Trump fine tune their pitch to voters.
The economy takes center stage in the presidential campaign as both candidates try to persuade voters that they would do a better job in tackling inflation and stimulating growth.Credit…Erin Schaff/The New York Times
It’s the economy, stupid
As Vice President Kamala Harris hits the road to start spelling out her economic agenda, she could point to recent progress in the inflation fight that has hounded the Biden administration and Democrats for the past two years.
But with one challenge seemingly coming under control, concerns about rising unemployment and a slowdown in growth loom just as both presidential candidates home in on the economy in their campaigns. Austan Goolsbee, the Chicago Fed president, summed up the shift in focus from prices to the labor market, telling Bloomberg on Wednesday, “on the margin, I’m getting more concerned about the employment side of the mandate.”
This conundrum will be in the spotlight on Thursday. Investors will be closely watching retail sales data and weekly jobless claims for signs about household spending and the strength of the labor market after a lackluster July jobs report. And watch what Jay Powell, the Fed chair, has to say about the slowdown in hiring during his address in Jackson Hole, Wyo., next week
This morning, Walmart, the retailing behemoth that serves as a bellwether for the U.S. economy, bolstered its full-year sales guidance. In an interview with CNBC, John David Rainey, Walmart’s C.F.O., gave a fragmented picture of consumers, noting “they remain choiceful, discerning, value-seeking,” but added, “we don’t see any additional fraying of consumer health.”
The good news for Harris: Wednesday’s Consumer Price Index report showed inflation last month fell below 3 percent for the first time since 2021. That prompted some congressional Democrats to take something of a victory lap, and renew their calls for the Fed to start lowering interest rates aggressively.
Traders also say that inflation has cooled enough for the Fed to act. This morning, the futures market was pricing in a percentage point worth of cuts this year, with a 0.25 percentage point reduction in September.
