Yahoo Finance This week in Bidenomics: Some happy October surprises
October began with some dour developments. Hurricane Helene ravaged parts of the Gulf Coast and Appalachia, killing more than 200. Iran bombarded Israel with missiles, triggering the dreaded escalation into a wider Middle East war. East and Gulf Coast port workers went on strike, threatening product shortages and price spikes.
“October surprises” are usually negative, and sometimes they affect presidential elections by dragging down one of the candidates just as swing voters are making up their minds. By most accounts, Democratic presidential nominee Kamala Harris would have the most to lose from jarring developments, since she represents the incumbent party controlling the White House.
But some positive October surprises rapidly offset a couple of the negative ones. The striking port workers went back to their jobs after just three days, with union members and their employer agreeing to continue negotiating several issues. There could still be another strike, but it wouldn’t happen until well after the November election, removing it from the electoral calculus. Voters in affected areas won’t be bummed out by banana shortages when they go to the polls.
Hurricane Helene, as awful as it was, probably won’t be an electoral matter, either. President Biden and Vice President Harris have both toured the region, and they’re certain to send all needed emergency aid to stricken communities.
There’s a bogus MAGA meme that the Biden administration can’t pay for relief efforts because it spent all the money housing undocumented migrants, as if any elected politician trying to keep his party in power could be that stupid. Fact-checkers have debunked the claim, while budget experts point out that Congress often approves disaster relief funds on an as-needed basis, since the need for such funding is unpredictable by nature. The Biden-Harris challenge is mainly making sure residents of North Carolina and Georgia — two possible swing states — are fully aware the feds are helping them out.
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Another upbeat surprise was the September jobs report, which handily beat expectations, indicating that the economy remains persistently strong. Economists expected businesses to add about 150,000 new jobs in September. In reality, they added 254,000. Bank of America called it “an A+ jobs report.” Capitol Economics called it a “blockbuster” print. Economist Ed Yardeni said the jobs news "should bury the looming recession scenario."
As an incumbent, Harris ought to be in a solid position on the economy. Growth is holding up while elevated inflation is retreating to normal levels. The Federal Reserve has provided a tailwind by beginning to cut interest rates. The Yahoo Finance Bidenomics Report Card rates the current economy an A-, with the only ding being middling real earnings, with high prices still depressing purchasing power compared with the economy under prior presidents. Yet that too is improving.
Some voters still remember the lower inflation during Trump’s four years in office and equate that with something special about Trump’s approach to the economy. More than anything, however, that’s just circumstantial, given that the pre-COVID years were disinflationary and the post-COVID years are hotter. Voters certainly are warming to Harris’s economic program, with some polls showing she has fully erased the strong edge Trump once had on the economy.
Now for the unhappy surprise, which isn’t all that surprising: More calamity seems likely in the Middle East, as Israel prepares to retaliate for Iran’s Oct. 1 missile attack. The Israelis could strike in several ways. The one approach that could still roil the US election would be an attack on the energy infrastructure that allows Iran to export oil into global markets. Oil prices have already jumped about $5 per barrel on worries this could happen, and they’d jump a lot more if it does. Iran could respond to that by trying to shut down the Strait of Hormuz, a conduit for about 21% of the world’s oil flows. That would be an ugly scenario for energy markets — and gasoline purchasers.
Israel could take a different tack, going after Iran’s nuclear weapons program, leadership targets, or military infrastructure. It’s a safe bet the Biden administration is pushing Israel to keep oil facilities off the target list and keep gasoline prices out of the headlines during the last few weeks of the election. Until the past week, gas prices have been falling toward a nationwide average of just $3 per gallon, the lowest levels since 2021. Biden and Harris assuredly want to keep gas prices trending lower.
The first few days of October were eventful ones. What else might happen before Election Day? There will be one more inflation report, which is very likely to show the continued stabilization of prices. The next jobs report comes four days before Election Day and is unlikely to change the narrative of a resilient economy. The next Fed meeting, and any decision about further rate cuts, won't happen till after Election Day. It’s a safe bet there won’t be any economic surprises during the next month.
Trump has been the target of two assassination attempts in three months, and who knows if the Secret Service has figured out how to plug holes. Trump is also 78, with a penchant for flubbing words and mixing up names, which could yet yield a meme-y embarrassment for him. Foreign governments are clearly trying to hack both candidates’ campaigns, and they’ve dug out meaty material before, so maybe they’ll strike again.
It might seem clever to say that maybe the biggest surprise of the next few weeks would be if there are no surprises at all. But we’ve already exceeded our quota for one election cycle.
Correction: This story originally said there will not be another jobs report until after Election Day on November 5. The next jobs report, in fact, is due November 1.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on X at @rickjnewman.
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