Jobs Report and End of Port Strike Offer Relief to Harris Campaign

Featured & Cover Jobs Report and End of Port Strike Offer Relief to Harris Campaign

A better-than-expected jobs report, coupled with the swift resolution of a longshoremen’s strike, has provided a significant boost to Vice President Kamala Harris’s campaign. The strike, which had the potential to severely disrupt the U.S. economy, was the most politically dangerous of several challenges Harris and the White House faced recently.

The White House moved swiftly to end the strike, applying pressure on both the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) to reach a deal. The strike, which began after the two sides failed to agree on a contract by Monday, shut down key ports along the East and Gulf Coasts. It threatened to bottleneck the economy just a month before the election, posing a major risk to Harris and the administration.

Fortunately for Harris, the strike was resolved Thursday night, with the longshoremen’s union and port operators reaching a tentative agreement after two days of stoppage. This resolution was further bolstered by Friday’s jobs report, which showed a stronger labor market than anticipated.

In September, the U.S. added 254,000 jobs, far surpassing the 140,000 jobs forecasted by economists. Additionally, revisions for July and August showed an extra 72,000 jobs were created during those months, suggesting that earlier concerns about a weakening labor market were overstated. The unemployment rate dropped slightly to 4.1%, further easing fears of rising joblessness.

This encouraging jobs report came as inflation moved closer to the Federal Reserve’s target. After peaking at 9.1% in June 2022, the highest in 40 years, inflation has since dropped to 2.5% as of August. Meanwhile, wage growth continues to outpace inflation, with average hourly earnings rising 4% over the past year.

The Federal Reserve, which had previously raised interest rates to combat inflation, indicated it was winding down its inflation-fighting efforts by lowering rates for the first time in September, with a 50-basis-point cut.

Mark Zandi, chief economist at Moody’s Analytics, praised the latest economic data, stating, “The jobs report for September cements my view that the economy is about as good as it gets.” He added, “The economy is creating lots of jobs across many industries, consistent with robust labor force growth, and thus low and stable unemployment.”

Zandi went on to emphasize that the U.S. economy is currently at full employment. “Wage growth is strong, and given big productivity gains, it is consistent with low and stable inflation. One couldn’t paint a prettier picture of the job market and broader economy,” he said.

President Joe Biden appeared at the White House press briefing to highlight both the resolution of the port strike and the positive jobs report. “The past two days, we’ve gotten some very good news about the American economy,” Biden said on Friday.

“Just yesterday, shipping carriers, after some discussion with the International Longshoremen’s union, came to an agreement to keep the ports of the East Coast and the Gulf ports open,” Biden noted. He emphasized the importance of this agreement, stating, “We averted what could have become a major crisis for the country.”

He also expressed excitement about the jobs numbers, saying, “Today, I got more incredible news.” Biden attributed the quick resolution of the port strike and the positive jobs report as signs that the economy was on solid footing.

According to Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist at the White House Council of Economic Advisers, the good economic news was a boost for Harris’s campaign. “Harris is not literally running for reelection, but she is coming out of an incumbent administration, so she is being judged on the state of the current economy,” Tedeschi said. “Anything that is good about the current economy probably helps her, whether fairly or unfairly.”

Although Harris has lagged behind former President Donald Trump in terms of handling the economy since joining the race in late July, recent polls suggest she has been making gains. A Marist poll conducted in September showed Harris trailing Trump by just four points on the economy, a notable improvement from the nine-point gap Biden had in June. Likewise, in a Fox News poll last month, Harris was only five points behind Trump, compared to Biden’s 15-point deficit in March.

Despite these improvements, Harris still trails Trump on economic issues in what is shaping up to be a close election. The Hill-Decision Desk HQ polling average shows Harris leading Trump by a slim 3.4%.

Had the port strike dragged on, it could have severely hurt Harris’s campaign. Experts estimated that the strike could have cost the economy as much as $5 billion a day, with consumers beginning to feel its effects if the strike had lasted several weeks.

Tedeschi warned that a prolonged strike could have reignited inflation, particularly short-term inflation similar to what was seen during the pandemic when supply chain disruptions caused prices to spike. “A port strike carried with it a lot of risk of inflation going forward, especially short-run inflation,” Tedeschi said, recalling the “supply chain bottleneck inflation” of the pandemic era.

The tentative deal between the longshoremen and port operators includes a 62% wage increase for dockworkers over a six-year contract. Additionally, both sides agreed to extend the current contract until January 15 to continue negotiations on other unresolved issues.

Had there been any weakening in the labor market, it could have also posed problems for Harris. The weaker-than-expected jobs report in July had led to concerns that the Federal Reserve had waited too long to lower interest rates, raising the risk of a recession.

Although the Fed opted for a more aggressive rate cut in September, Fed Chair Jerome Powell defended the bank’s earlier decision to hold rates steady, a move now seen as justified by the recent economic data.

However, the Trump campaign was quick to attack Harris following the release of Friday’s jobs report, criticizing her on manufacturing, immigration, and the lingering effects of inflation.

“Kamala Harris and Joe Biden have built back broke, losing 34,000 manufacturing jobs in just the past two months as foreign countries benefit from Harris’s weak economic policies,” said Karoline Leavitt, national press secretary for the Trump campaign.

Leavitt also argued that the administration’s “open border policies” had “destroyed” 825,000 jobs for native-born Americans in the past year, while creating 1.2 million jobs for foreign-born workers during the same period.

However, this trend is largely attributed to the retirement of baby boomers, as many U.S.-born workers have exited the workforce. Tedeschi and other economists have pointed out that the percentage of native-born Americans with jobs is at its highest level since the federal government began tracking this data.

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