A three-headed economic monster lurches into the presidential campaign

Analysis by Allison Morrow, CNN

New York (CNN) — With barely a month to go before the US presidential election, a trifecta of economic shocks is threatening to sap Vice President Kamala Harris’ momentum on voters’ No. 1 issue: a port strike, a hurricane and an escalation of fighting in the Middle East.

None of these developments are good news for the US economy, which, while strong on many levels, is in a bit of an awkward phase.

But all of them offer political ammunition to Republicans trying to cast the vice president as part of a failed administration that has left American consumers hobbled by years of high prices (while conveniently ignoring three-plus years of relentless job growth and consumer spending).

Former President Donald Trump hasn’t wasted any time trying to pin the sense of chaos on his rival, perhaps hoping that voters simply forget the chaos of his own presidency. “The world is on fire and spiraling out of control,” he said in a statement Tuesday.

Representatives for Harris, who met with first responders in Georgia on Wednesday, declined to comment.

Obviously, no single person or administration caused these events. But in an election in which the Republican and Democratic candidates are virtually tied and voters are fixated on the economy’s health, the optics of this week’s news look worse for the party in power.

Pressure on prices

Falling gas prices in the US should have been a wind at Harris’ back because voters, fairly or not, tend to associate the price at the pump with the party occupying the White House.

Prices have been on track to fall below $3 on average before the end of October. But the sudden escalation of fighting in the Middle East caused global oil prices to spike Tuesday and Wednesday, raising the prospect of higher prices for American drivers.

Price pain could crop up elsewhere if the East Coast port strike, which began Tuesday, drags on longer than a week.

The work stoppage is halting the flow of a wide variety of goods over the docks of almost all cargo ports from Maine to Texas. By some estimates, the strike could drain the economy of $5 billion a week. The longer it goes, the more likely it is that consumers will feel the impact through shortages at the grocery store and higher prices on some items.

“The last thing the supply chain, companies and employees … need is a strike or other disruptions,” business leaders wrote in a letter to the White House last week, urging the Biden administration to intervene.

Job market angst

Meanwhile, tragedies are piling up in the Southeast, where at least 180 people have died since Hurricane Helene struck the area last week. Roads remain closed, and power is off across swaths of the Carolinas, Florida and Tennessee as of Wednesday. While the economic hit to the region is hard to predict at this point, Moody’s said Monday it expects the figure to come in as high as $34 billion.

Almost certainly, the hurricane’s destruction will lead to temporary job losses and furloughs as businesses regroup. Those layoffs, combined with similar losses related to the Boeing and port strikes, could deliver a rather gloomy October jobs report — due the first Friday of November, aka four days before Election Day.

Consider this: Every month for the past four years, the US has added jobs at an impressive rate, powering the economy out of its short-lived pandemic recession and giving the Biden administration an impressive record to hang its pro-labor message on.

But the shock of multiple strikes, plus Hurricane Helene, could end that streak.

“If the Boeing strike and the port strike … last through the second week of October, job growth for October could be negative,” researchers at Oxford Economics wrote Wednesday.

A negative jobs report hasn’t been seen in this country since December 2020, the last full month of the Trump administration. And while any October job losses would likely be temporary, the timing of the report — always the first Friday of the month — is especially inconvenient for the Harris camp.

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