A customer walks by a display of fresh eggs at a grocery store on Sept. 25 in San Anselmo, California. Grocery prices rose 0.4% in November, according to the Consumer Price Index, leading to tougher times for many during the holiday season. (Photo by Justin Sullivan/Getty Images)

A rise in food prices makes for a less than merry holiday season.

Grocery prices rose 0.4% in November, according to the Consumer Price Index, released this week by the U.S. Bureau of Labor Statistics.

Eggs made one of the biggest jumps at 8.2% over the month, and 37.5% over the past year, providing challenges for people trying to eat a somewhat cheaper protein and families cooking holiday foods such as sugar cookies and jelly doughnuts.

Although the increase in food prices has moderated a bit from past years, they are still more than 20% higher than they were before the pandemic, according to David Ortega, at Michigan State University.

“It was a key issue in the election in terms of people really feeling that sticker shock at the grocery store,” said Ortega, a food economist.

President-elect Donald Trump vowed to bring down prices during his campaign and blamed the Biden administration for how they reached this point. But in an interview with TIME published this week, Trump said he does not believe his presidency would be a failure if grocery prices do not come down.

“It’s hard to bring things down once they’re up,” he said.

Price changes to understand before you set the holiday table

The increase in grocery, or food at home prices, was partly driven by the rise in egg and beef prices, Ortega said. He said the price of holiday roast has been affected by drought and high feed prices. This year, the inventory of beef cattle was the smallest beef herd since 1951.

“On eggs, the story continues to be bird flu together with increased consumer demand given the holiday season,” he said following Wednesday’s release of the latest Consumer Price Index. “And for beef the issue is supply — high input costs and decisions that beef producers made a couple of years back when they were facing drought and high feed prices which has reduced beef supply, and this in turn is affecting beef prices.”

The latest food price numbers presented a mixed bag for holiday shoppers looking to bake treats this month. Flour and prepared four mixes fell 1% and bread decreased 1.3%, while sugar and sweets rose 0.2%, and butter ticked up 1.5%.

Oranges, including the popular stocking stuffers tangerines, fell 1.8% in the latest Consumer Price Index report.

The rise in cost of eating your meals at home compared to the rise in cost of eating out is also getting narrower, with the gap in inflation between restaurant menu prices and grocery year-over-year prices being the narrowest it has been since May 2023, according to Supermarket News. Food at home in previous reports rose 0.2% and 0.4% compared to 0.2% and 0.3% for the past two food away from home reports.

Are companies profiting off of uncertain times?

Rakeen Mabud, chief economist at the Groundwork Collective, a left-of-center economic think tank, said that just a few seed producers, meatpackers, and grocers dominate the food industry, which is a key part of the story of what drives grocery prices. This hurts lower-income shoppers the hardest. Oklahoma, Iowa, and Arkansas are some of the states most dominated by a single grocer, such as Walmart or Hy-Vee.

“Across the food and grocery industry, we have a sector that is deeply consolidated,” Mabud said.  … And so when you have big companies controlling such large chunks of the market, we know that they have used things like inflation, things like supply chain shocks to jack up prices far beyond what their input costs to justify.”

Mabud said that when there is this level of market concentration, companies can signal to each other in earnings calls that they are going to start raising prices.

“If you know that your only other competitors are also raising prices, there’s kind of no reason for you to try to undercut them if you both hold giant shares of a market,” she said.

An economic paper published this year found that companies are able to coordinate price increases around cost shocks and increase profits from these events. Mabud said the holidays provide plenty of opportunity for the food industry to raise prices on things people ordinarily don’t buy and don’t have a price comparison for during a less in-demand season.

“Grocers and the food industry kind of know that they know that they have more information about the underlying cost of a good than a consumer who only comes to buy the Christmas ham once a year. And so they can take advantage of that,” she said.

An unhappy new year for grocery shoppers

Economists are watching out for how the next administration will impact food prices.

Trump’s promise to impose heavy tariffs on the U.S.’s biggest trading partners – Mexico, Canada and China – are expected to drive up the cost of everything, including groceries.

Products the U.S. can’t produce year round, like fruit and coffee, will be affected, Ortega said.

“There’s still a lot of uncertainty in terms of whether these tariffs are really going to be implemented or are they a negotiating tool? But that creates a lot of uncertainty,” he said. “Even that amount of uncertainty can lead to a rise in costs as companies prepare for the potential of these tariffs taking place.”

Trump’s expected policy of mass deportation of immigrants will also affect the agriculture industry, in addition to the major human rights implications.

“If there’s a mass deportation that is a shock to the labor supply and the agricultural sector. And that will lead to an increase in costs as producers and companies have to offer higher wages to attract enough labor. Ultimately that gets passed down to the consumer in the form of higher prices,” Ortega said.

Mabud is also concerned that expected tariffs could mean companies take advantage of the policy change well beyond the actual financial impact to their business.

“It’s a policy change where consumers don’t necessarily know how much the price of an avocado is going up because of a tariff versus a supply chain issue versus the grocery store just wanting to increase the price,” she said.

Patricia “Pogo” Overmeyer, 65, who works as a lawyer in Arizona and lives with her retired husband, said she has always been focused on how to save money on groceries. But she said she has become even more thrifty since inflation worsened.

She said she’s been using more meatless meals and stocks up on holiday food all year round when prices are low, some of which she freezes and cans.

“Once I retire, our income will not be as high,” she said, “Most likely I will forgo some foods or make substitutions. It’s anyone’s guess as to what we will be paying for groceries.”

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Boeing workers gather on a picket line near the entrance to a Boeing facility on Oct. 24 in Seattle. The strike ended with a deal in November. Those workers returning to the job factored into growth reported in the latest labor report. (Photo by David Ryder/Getty Images)

The economy added 227,000 jobs in November, making for a strong jobs report despite a slight increase in the unemployment rate. Although the labor market has cooled this year, the Trump administration stands to inherit a fairly healthy labor market, with decent job growth across many sectors.

The number of jobs was bolstered by the return of striking workers, according to the U.S. Bureau of Labor Statistics report. Employment in transportation equipment manufacturing rose by 32,000 jobs. Boeing machinists who went on strike in September seeking higher pay and better retirement benefits reached a deal in November.

The agency also revised up the number of jobs added in the October and September reports by 56,000 jobs combined.

Although the unemployment rate ticked up from 4.1% to 4.2%, the economy is looking strong, particularly when you look at gross domestic product, said Louise Sheiner, with the nonpartisan Brookings Institution.

“It’s been remarkably strong. If you look at what the Congressional Budget Office projected the level of real GDP before the pandemic, it’s higher now. We’ve just had a really strong economy,” said Sheiner, who focuses on fiscal policy.

Although she said the labor market has been slowing a little, it’s still healthy.

Elise Gould, senior economist at the left-leaning Economic Policy Institute, said the three-month average of job growth at 173,000 jobs shows a fairly strong labor market.

Employment in health care and government, including state government employment, continued to add jobs. Leisure and hospitality added 53,000 jobs and food services and drinking places added 29,000 jobs.

Gould said she is keeping an eye on the employment-to-population ratio, a measure of workers employed versus the working-age population. The measure is down 0.6 percentage point over the year.

“Let’s pay attention to that and see where that goes,” she said. “We were at a pretty nice high this summer that has come down a bit.”

Economists will also keep an eye on demographic data changes in the next jobs report. The unemployment rate for Black men jumped from 5.7% to 6% and the unemployment rate for Black women increased from 4.9% to 6%. Economists and policy experts said that although they will be watching these numbers, they don’t think the higher unemployment rate for Black people will necessarily continue. The month-to-month data can be volatile and may not point to a broader trend, they said.

“The Black unemployment rate jumped to 6.4% which is the highest since March and then looking at Black women, we saw their unemployment rate jumped to 6% which is the highest that we’ve seen in 2.5 years,” said Clara Wilson, senior policy analyst at the Groundwork Collaborative, a left-of-center economic think tank. “However, the spike in Black unemployment is something to always keep a track of because if we continue to see a rise in Black unemployment that typically is a warning signal canary in the coal mine that there could be further weakening in the labor market down the line.”

Retail jobs fell by 28,000, with a loss of 15,000 in general merchandise and 4,000 in electronics and appliance retailers.

“I’m not particularly concerned about it because it can be due to the fact that it was just a late Thanksgiving this year, so that holiday hiring may not have happened during the reference period in the same way,” Gould said.

Average hourly earnings rose 0.4%, the same as October, and 4% over the past year. Although some economists say the Federal Reserve would like to see wages come down to help it meet its 2% target for inflation, Wilson said higher wages are an indication that workers are benefiting from the current economy. She said she’s worried that the Trump administration will undo some of the economic progress she said has been made from the Biden administration’s major legislation.

“It’s really important to remember that real people are behind the data and the strong labor market propels more opportunities for workers and ensures families have higher wages and that leads to a stronger economy. Policymakers should take those lessons that we’ve learned from those strong public investments and sustain that progress,” Wilson said.

A ‘For Sale’ sign is seen on March 19 in Austin, Texas. Policymakers are watching for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy.

Americans hand over a huge chunk of their paycheck for a roof over their heads. Policymakers are looking out for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy.

Housing accounted for 32.9% of consumers’ spending in 2023, making it the largest share of consumer expenditures, according to the most recently available data Bureau of Labor Statistics. And that was an increase of 5.7% from 2022.

This year, many Americans still struggle to find affordable housing, whether they choose to rent or buy a home.

There’s a lot economists and housing advocates still don’t know about what to expect from a second Trump term. It’s unclear which campaign promises will find their way into administrative rules or  legislation, even with a Republican trifecta – the GOP will control the White House and both chambers of Congress.

But policy experts, researchers and economic analysts are looking at Trump’s record, his recent remarks on housing, and  Project 2025 – the conservative Heritage Foundation’s 900-page plan to overhaul the executive branch – for a glimpse of what may lie ahead.

Tariffs and the cost of building homes

Trump has spoken frequently of his proposed 60% tariff on goods from China, which he has said would create more manufacturing jobs in the U.S. Tariffs could be as high as 20% on goods from other countries.

But housing economists and other experts say that could be bad news for building more affordable housing.

Selma Hepp, chief economist for CoreLogic, a financial services company, said tariffs are one of her main concerns about the effects of a second Trump term.

“One of the biggest concerns is not just lumber [costs], but the overall cost of materials, which have been going up,” said Selma Hepp, chief economist for CoreLogic, a financial services company.

Construction material prices have risen 38.8% since February 2020, according to an Associated Builders and Contractors’ analysis of October Producer Price Index data.

Kurt Paulsen, professor of urban planning in the department of planning and landscape architecture at the University of Wisconsin at Madison, said building costs are already high from tariffs on Canadian lumber that Trump first imposed and that the Biden administration kept and increased.

“It used to be in construction that you would get a bid from a contractor or a subcontractor or supplier and it would be good for 60 days. Now, the bids are good for like five days because you don’t know where prices are going to be,” he said.

Immigration policy and its effect on construction labor

Trump tweeted on Nov. 18 that he is planning to use the declaration of a national emergency as part of his mass  deportation plan.

Besides disrupting lives, Trump’s plan  could have effects on what it costs to build housing, Hepp said.

“There is the cost of labor as well, if we do indeed have all these deportations. That’s a big, big concern,” she said. “A large share of labor in the construction industry obviously comes from immigrants. That is a huge issue for new construction and particularly new construction as it relates to affordable housing.”

Foreign-born construction workers made up 3 million of the 11.9 million people who work in the construction industry in 2023, according to the latest American Community Survey data.

Trump’s ‘not in my backyard’  rhetoric

The former president hasn’t always been clear on where he stands with zoning regulations and making way for more affordable housing in a wide variety of neighborhoods.

In a July Bloomberg interview, Trump spoke critically of zoning regulations and said that they drive up housing costs. But Trump also has a record of tending toward a “not in my backyard,” or NIMBY, approach to housing that maintained some of these zoning regulations. The Trump administration moved to roll back an Obama-era regulation that tied HUD funding to assessing and reducing housing discrimination in neighborhoods.

“He’ll talk about reducing regulations on developers, but he’ll also use this NIMBYism talking about protecting suburbs from low-income housing and you really can’t have it both ways,” said Sarah Saadian, senior vice president of public policy and field organizing at the National Low Income Housing Coalition.

Paulsen said Project 2025 embraces a pushback against anti-NIMBY approaches to expand multi-family housing.

“What I read in the Project 2025 documents is a clear statement that says every local community and neighborhood should be able to choose the housing it wants to accept or not. The challenge of that is that if every community in every neighborhood can veto housing, then we just don’t get enough housing and prices go up and prices and rents go up,” he said.

A more punitive approach to homelessness 

Last year, homelessness rose to its highest level recorded since the U.S. Department of Housing and Urban Development began collecting this information in 2007. The ending of pandemic safety nets that gave some households better financial stability and a lack of affordable housing supply contributed to the number of unhoused people, the report explained.

Trump has been outspoken on his view that homeless people should be “off our streets.” The president-elect has also proposed putting unhoused people with mental health issues into “mental institutions.”

“There’s a movement that I think is largely reflected in Project 2025 that says, actually, cities need more coercive policy tools to enforce public order and to require that someone who’s camping take a shelter placement even if they don’t want it,” Paulsen said.

Saadian said that given the U.S. Supreme Court ruling in Grants Pass v. Johnson, which makes it easier to criminalize unhoused populations for sleeping outside, she’s worried about a changing political environment where policies that prioritize stable housing over policing fall out of favor.

“I think all of that just shows a culture shift in the political dynamic here that we’re definitely worried about,” she said.

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A Connecticut Department of Transportation crew works on an Interstate 95 bridge on Nov. 05, 2023, in Westport, Connecticut. The Federal Reserve’s rate cut earlier this month could mean lower borrowing costs for state and local governments and bring changes for housing development, tax revenue and road, water and sewer construction. (By John Moore/Getty Images)

The Federal Reserve’s second consecutive key rate cut could mean more than just lower borrowing costs for the average consumer — state and local governments stand to benefit, too.

Lower interest rates may bring changes for housing development, tax revenue, debt refinancing and bread-and-butter projects like roads, water and sewer, state and local government officials told States Newsroom.

The Fed’s cut earlier this month followed an aggressive rate-hiking campaign to beat down inflation, and it came years after the last time the U.S. central bank lowered interest rates. Key borrowing rates now stand at 4.5 to 4.75%, and inflation has cooled to 2.7%. Economists expect another rate cut in December.

“On average, the lower the interest rates are expected to help stock market returns if historical trends hold,” said Liz Farmer, who focuses on budgets, fiscal distress, tax policy and pensions at The Pew Charitable Trusts. “So generally, you would expect a more positive effect on your average pension portfolio that has a good amount invested in equities.”

This change means states and localities will have lower borrowing costs, which will make it easier to make big long-term changes in infrastructure, to see higher sales tax collections as a result of more spending, and it is likely to result in better pension performance in an environment where stocks tend to respond to lower rates, fiscal policy experts at Pew say.

In 2021 and 2022, states had record high revenue growth due in part to federal pandemic aid and the impact of the federal aid on workers and businesses, according to Pew. But that kind of growth was unsustainable.

Recently, nearly all states have entered into a slower revenue growth environment, said Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers, a professional membership group for budget and finance officers. More than three dozen states had a fall in revenue in fiscal year 2023,  Pew’s analysis found. At least five states experienced budget shortfalls in fiscal year 2024, the think tank explained.

“States overall are remaining in a strong fiscal position. It’s just that we’re starting to see slower growth compared to what we did see for those a couple of years after the start of the pandemic,” he said. “That was really a unique set of circumstances where we had the additional federal aid provided by all the different COVID relief bills and at the same time where state revenue growth was growing so strongly, and that led to very strong growth in tax collections.”

Sigritz said that states, which have to almost entirely use borrowing for infrastructure and capital projects, will benefit from lower borrowing costs as a result of the Fed rate cuts.

David Schmiedicke, finance director for the city of Madison, Wisconsin’s finance department, said he’s hopeful that the lower cost of borrowing will reduce the cost of public infrastructure when seeking construction bids.

“We’re seeing a lot of development, even with the higher rates. Madison is an attractive place to live. People from around the country are moving here,” he said.

Rebecca Fleury, the city manager for Battle Creek, Michigan, said interest rates affect key services the public relies on, including fire departments.

“[Interest rates] have an impact on our ability as a city of 52,000 to provide the full services that we do. Every little bit impacts us, because we have to buy fire trucks,” she said.“If there’s a decrease in one of our three largest revenue sources, we feel it.”

But there are both pluses and minuses to the cut in the federal funds rate, Schmiedicke said, as it brings down the interest income states receive.

“It probably will reduce the amount of investment income the city receives on its cash balances. We saw that go up dramatically in 2022 and 2023, so that’ll probably come down as the Fed cuts rates,” Schmiedicke said.

Different tax policies also change how states and localities experience the Fed rate cuts.

H.D. Palmer, deputy director for external affairs and principal spokesman on fiscal and financial issues for California Gov. Gavin  Newsom, said that the lower interest rates are overall positive for the nation’s largest state because of the concentration of technology firms there, its progressive tax rate, and the taxing of capital gains and stock options as personal income.

“When the markets are doing well, those types of firms that are concentrated in California do well and in consequence, our revenues do well,” Palmer said.

The Alabama Department of Finance told States Newsroom that it is closely following the Fed’s actions as it “closely follows all actions that could impact our citizens and the State’s revenues.”

But the state agency said it may take some time to see any of the effects of recent rate cuts.

“While recent changes in the federal funds rate may lead to increased state revenues, absent a significant change in the rate, the impact on revenues and expenditures would not likely be seen immediately. We will continue to monitor and assess all economic indicators to ensure steady, sustainable, conservative growth for the benefit of all Alabamians,” the department said in a statement.

Schmiedicke said Wisconsin is very reliant on property taxes because although state law allows a statewide sales tax and counties can impose a 0.5% sales tax, cities other than Milwaukee have not been able to do so. The state also has strict limits on property tax increases.

“We could see more development in the city and that could definitely help with our overall property tax base, as well as if it results in more travel and room taxes,” he said.

As states and localities wrestle with how to provide more affordable housing, with nearly half of renters having to spend more than 30% of their income on housing, lower interest rates could help spur more building. Fleury said the costs of loans and labor and materials has been “astronomical,” making it hard for developers to build. Although she said Battle Creek would love to take advantage of Low Income Housing Tax Credits, it’s challenging to fund projects.

“I think that a lower interest rate could really help us get farther along in our housing plans,” she said “If you can’t get your project to pencil within what they’re able to fund or finance, we just never make the list.”

Despite lower interest rates creating a better environment for affordable rent and homes, states will likely continue to spend a lot of energy on housing programs, Sigritz said. Governors’ budget proposals and state of the state speeches have prioritized affordable housing more and more in the past few years, he said, and he expects this to continue.

“Housing affordability is not an issue that’s going to go away overnight, and there’s still a need for more housing,” Sigritz said. “It takes a while to build additional housing even in the lower-interest environment.”

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Sale prices are displayed for items at a grocery store in San Rafael, California, on Sept. 10, 2024. Grocery prices are just one piece of the U.S. economy, which is key to many voters in their pick for president. (Photo by Justin Sullivan/Getty Images)

The economy is key to many voters in their pick for president, but that fervor also makes  it an attractive subject for distortions, misinformation, and oversimplification.

Nearly eight  in 10 U.S. voters say that the economy is one of the most important issues to them in this upcoming presidential election, according to an AP-NORC poll conducted in September. Although 66% of voters say the economy is very or somewhat poor, six in 10 also say their personal finances are good.

Millions have already cast their ballots through early or mail voting. But those who are still deciding between the two main candidates – Democrat Kamala Harris and Republican Donald Trump – have until Nov. 5 to wade through various myths and exaggerations to understand the state of the economy and each candidate’s record on related issues.

What is the state of inflation in the U.S.? 

The most recent cycle of inflation reached its peak in June 2022 at 9.1%. Inflation has fallen considerably since then and to a more manageable 2.4% in September’s Consumer Price Index, a measure of inflation. Wage growth, meanwhile, has beaten inflation for more than a year. The Federal Reserve cut its key interest  rate by half of a percentage point for the first time in four years in September after inflation neared  toward its goal of 2%.

But those macro figures don’t hit home with everyone, because of the prices of groceries and other essentials.

The literal prices that people see on goods make them think that they’re not doing as well because they feel that they are higher than they think they should be,” said Elise Gould, senior economist at the left-leaning Economic Policy Institute But, those prices are actually lower as a share of their wages than they were four years ago.”

This doesn’t mean that many voters’ experiences of struggling to afford basic items aren’t real. The cost of housing is very high and puts a strain on people’s budgets. The Fed’s interest rate policy affected credit card rates, and thus, people’s ability to make purchases.

Gould said that despite the positive news of slowing inflation, the lack of long-term wage growth before this recent increase has been hard on many Americans.

“Even though things are good, we know that for the vast majority of people over the last several decades, they’ve been faced with relatively slow wage growth and so it can be hard to feel like you’re going to get ahead,” she said.

Was unemployment higher under Biden or Trump? 

The unemployment rate under Donald Trump was fairly low, at 4.7%, when he took office in 2017 , and it mostly trended lower until the beginning of the pandemic. It then shot up to 14.8% in April 2020 and fell sharply for the rest of Trump’s term, which ended in January 2021. The unemployment rate was 6.7% during Trump’s last full month in office.

The labor market has been fairly hot under President Joe Biden. The unemployment rate was 6.4% during the month he and Harris were sworn into office. But since then, it largely fell, and from February 2022 to April 2024, the unemployment rate was below 4%. In September, the unemployment rate was 4.1% but the economy continues to show strong job growth.

Looking at the Biden-Harris administration’s record and Trump’s record outside of the immediate economic impact of the recession and supply shocks during their presidencies, unemployment remained fairly low. Overall, unemployment averaged 3.8% since 2022 and averaged 4% between 2017 and 2019, before the pandemic hit the economy in 2020.

Labor force participation rates and the employment-to-population ratio, measures of the number of people in the labor force and workers employed versus the working age population, were high in the last jobs report and show signs of a healthy labor market.

Skanda Amarnath, executive director of Employ America, a left-leaning group focusing on economic policies, said that it’s also important to understand the percentage of the population adjusting for age, the prime age employment rate. It is marginally higher now, by about 0.3%, than it was right before Covid struck, during the Trump administration, he said.

“We’ve seen generally slower paces of employment gains more recently and that might be just because a lot of people are now back in the labor force itself. It’s probably a little harder to grow employment quickly when you’re coming from a high level as opposed to a low level,” Amarnath said. “Nevertheless, we’re at an employment rate where there’s been a reasonably strong labor demand, a little bit combined with the fact that people are also moving out into their retirement years.”

The American Rescue Plan Act, CHIPS and Science Act, Inflation Reduction Act, and bipartisan infrastructure deal, enacted during Biden’s presidency, helped fuel the recovery, Amarnath said. The CARES Act, which was signed into law byTrump, likely helped the U.S. avoid a protracted recession, he added.

What would Trump’s proposed  tariffs do to the U.S. economy

In an interview with John Micklethwait, editor-in-chief of Bloomberg News at the Economic Club of Chicago on Oct. 15, former president Trump said tariffs would be good for economic growth.

“We’re going to bring companies back to our country … We’re going to protect those companies with strong tariffs because I’m a believer in tariffs,” he said.

The Trump campaign has also proposed a 60% tariff on goods from China, one of the U.S.’s largest trading partners, and 10-to-20% on other imports. The Tax Foundation, a business-friendly research think tank, estimated that if Trump’s proposed tariffs were to be implemented, it would reduce GDP by at least 0.8% and eliminate 684,000 jobs.

Tariffs would likely result in lower trade and retaliatory tariffs from other countries, raising prices, and costing each household between $1,900 to $7,600 in 2023 in dollars, according to the Budget Lab at Yale, a nonpartisan policy research center.

“If the tariff wars back in President Trump’s first term are any indication, they’re going to respond with their own tariffs and other trade actions,” said Mark Zandi, chief economist at Moody’s Analytics. “Broadly, tariffs are going to raise prices for imported goods, weaken consumer purchasing power and slow growth.”

Zandi added that although the retail sector would be particularly hard hit by these tariffs, he doesn’t think any industry would come away unscathed by the policy.

How do Harris and Trump’s economic plans compare? 

Harris has said her plans, which include building more affordable housing supply, restoring and expanding the child tax credit, and supporting legislation to expand labor rights, have been approved by respected economists and sources of financial research.

“Please do check out the Wall Street Journal or Goldman Sachs or the 16 Nobel laureates or Moody’s, who have all analyzed the plans and said mine will strengthen the economy, his will make it weaker,” Harris said.

The reality is a little more complicated. Some of the reports Harris referred to do not say the economy would weaken under Trump but would grow less than the economy under Harris in certain scenarios, depending on the political breakdown in Congress.

Others show the GDP falling more as a result of Harris’ proposals. The Penn Wharton Budget Model looking at Trump and Harris proposals shows the GDP falling 0.4% under Trump by 2034 and declining 1.3% under Harris over the same period, but notably, it does not factor in proposals not to tax tips, mentioned by both candidates, or Trump’s tariff policies.

Before Biden withdrew his candidacy, 16 Nobel-prize winning economists said Biden’s investments in the economy through signing legislation to improve infrastructure and manufacturing would boost economic growth. They spoke out against Trump’s tariff plans. Although Harris is part of the Biden administration, they did not address her specific plans as a candidate. On Wednesday, 23 Nobel-prize winning economists, including the economist who led the last letter, Joseph Stiglitz, endorsed Harris’ specific policies.

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The U.S. Bureau of Labor Statistics released a report showing a strong labor market with growing wages, a lower unemployment rate, and the addition of 254,000 jobs to the economy. (Photo by Joe Raedle/Getty Images)

A month before voters cast their ballots, the U.S. Bureau of Labor Statistics released a report showing a strong labor market with growing wages, a lower unemployment rate, and the addition of 254,000 jobs to the economy.

Eighty-one percent of registered voters say the economy is key to their vote for president this fall, according to a September Pew Research report.

“We saw job creation beating expectations, unemployment rate ticking ever so slightly down, and we saw great wage growth which has continued to outpace inflation,” said Kitty Richards, senior strategic advisor at Groundwork Collaborative, a progressive economic policy think tank. “We don’t have the new inflation numbers for last month, but wage growth is strong and has been outpacing inflation for about 16 months now and those are all really good things.”

The unemployment rate in September was 4.1% compared to 4.2% in August and 4.3% in July. A rising unemployment rate earlier in the year had caused some economists to worry that the Federal Reserve’s decision in the past few months not to cut the federal funds rate was beginning to hurt the labor market.  In September, the Fed decided to cut the rate by half a percentage point, allaying those worries.

The Fed began an aggressive campaign to beat inflation by raising rates in March 2022 and stopped in mid-2023 but the rate remains high and has affected the economy, particularly the housing market, economists say. Inflation has significantly cooled since its peak in June 2022.

“If today’s job report had said that the labor market was softening further, I think a lot of us would be more aggressively concerned about the risks posed to the labor market by high interest rates,” Richards said. “It’s great to see that those risks have not tipped over yet … But there are risks and we need to be really mindful of what it would mean if we started to see the unemployment rate picking up again.”

The report also showed continued job growth in healthcare, government, social assistance and construction last month. Wage growth was strong, rising 4% over the past year.  Adult men saw their unemployment rate fall, at 3.7%, last month. Women, Black people, Asian people, white people, Hispanic people, and teens all had little or no change in their unemployment rates in September.

The prime-age employment-to-population ratio, which is a measure of how well the economy provides jobs for people who are interested in working, remains at a 23-year high in today’s jobs report.

“I think the labor market continues to be healthy and strong and it’s great to see labor force participation and employment-to-population rates staying high,” Richards said. “That’s what we want to see in the kind of economy that is going to drive wage gains for working people and continue some of the gains that we’ve seen since the COVID recession.”

But she added that there is still room for those measures to grow.

“We’ve seen that the economy can outperform what a lot of people thought before we had this really prolonged period of low unemployment coming out of the COVID recession. And I hope that we continue to see this kind of growth,” she said.

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Dockworkers demonstrate Tuesday, Oct. 1, 2024, at Maher Terminals in Elizabeth, New Jersey. Members of the International Longshoremen’s Association went on strike from Texas to Maine after the union failed to reach a new contract agreement with the United States Maritime Alliance over wages and automation. Tens of thousands of workers on strike could snarl supply chains, just a month ahead of the U.S. presidential election. (Photo by Mark J. Bonamo for New Jersey Monitor/States Newsroom)

ELIZABETH, N.J. — Tens of thousands of dockworkers went on strike from Texas to Maine on Tuesday to demand higher wages and a ban on all automation at ports in a move that could snarl supply chains only a month ahead of the presidential election.

The International Longshoremen’s Association union and the United States Maritime Alliance, which represents employers in the longshore industry, were unable to reach a new contract agreement. This is the union’s first strike since 1977, when dockworkers stopped work for several weeks.

More than 500 union members gathered at the gates of Maher Terminals in Elizabeth, New Jersey early Tuesday for the start of the strike. Harold Daggett, International President of the ILA, rallied the crowd as he spoke at one of the main container terminal operators at Port Newark–Elizabeth Marine Terminal, an important facility for goods entering the New York Metropolitan area.

“These greedy corporations, everything they got, they got from us. We’re the ones who worked through the pandemic to make them the money they got,” Daggett said in an interview.

When asked how long the strike would last, Daggett said that union members will stay on strike “until the end.”

On Monday, the ILA said employers were price-gouging customers by charging much more for containers, which would lead to higher prices for consumers. It stated that the wages offered by USMX were still too low to accept.

“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject,” the union said in a statement.  “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing.”

Scott Weiss, a member of ILA Local 1804-1, inspects containers that come off of ships entering at Port Newark–Elizabeth Marine Terminal, as well the chassis of the trucks that then carry the containers filled with goods away to destinations all along the East Coast.

Weiss said that the union is asking for wage increases that can cover the cost of inflation, and that a human eye is still needed to do his job right, even in the face of increasing automation.

“Employers push automation under the guise of safety, but it’s really about cutting labor costs to increase their already exceptionally high profits. Automation of our nation’s ports should be a concern for everyone,” he said. “The truth is robots do not pay taxes, and they do not spend money in their communities.”

The union said it will continue to handle military cargo and work passenger cruise ships.

Before the strike began, USMX said it offered a wage increase of nearly 50% and increasing employer contributions to employee retirement plans. USMX said their offer would still retain the same language on automation. The employers filed an unfair labor practice complaint on Wednesday with the National Labor Relations Board in which they accused the union of refusing to come to the bargaining table.

“In the last 24 hours, the USMX and ILA have traded counter offers related to wages. The USMX increased our offer and has also requested an extension of the current Master Contract, now that both sides have moved off their previous positions. We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues – in an effort to reach an agreement,” USMX said in a statement Monday.

Voters remain laser-focused on the economy heading into the Nov. 5 election. Eighty-one percent of registered voters say the economy is very important to their vote for president this November, according to a poll published last month from the nonpartisan Pew Research Center.

Lauren Saidel-Baker, a speaker and economist at ITR Economics, a nonpartisan economic research and consulting firm based in New Hampshire, said that the longer the strike goes on, the greater the impact will be on inflation. Inflation cooled significantly enough for the Federal Reserve to cut the federal funds rate by half a percentage point last month.

“If this is just a week, again, there will be short-term disruptions and maybe things take a little bit longer to get where they’re going. That could be a risk for perishable items,” she said.

The supply chain issues that affected retail prices at the beginning of the pandemic may have prepared businesses for some disruption, she said, and this could mitigate some of the effects for consumers in the short term.

“We’re in a very unique situation where we just had this major, major supply chain disruption that caused a lot of American businesses to make contingency plans in a way that they just haven’t in the past. We have creativity and increased flexibility that will help us if this is just a brief disruption,” she said. “We still have elevated inventories in some sectors, so there might be a little bit more buffer in certain goods getting where they’re going.”

Aside from the economic effects on consumers, strikes can have spillover effects on other groups of workers. If dockworkers secure a strong contract as the result of this strike, it could affect other industries. Alexander Hertel-Fernandez, associate professor of international and public Affairs at Columbia University, and former deputy assistant secretary for research and evaluation at the U.S. Department of Labor, said the success of auto worker strikes and the Hollywood strikes may have emboldened union dockworkers.

“I think you’re likely to see other industries, particularly those most closely aligned with, um, transportation and logistics, really pick up the baton on that, especially if the economic and political environment continues to be favorable to them,” Hertel-Fernandez said.

The U.S. Chamber of Commerce has called on the Biden administration to invoke the Taft-Hartley Act, which allows presidents to intervene in strikes if it creates a national emergency. President Joe Biden has said that he does not plan to do so.

Biden’s position is unlikely to change, Hertel-Fernandez said, because of the politics of the timing.

“I think you would see a pretty negative response from the labor movement if they were to do so,” he said. “Given that it’s so close to the election, where labor is such an important constituent for the Democrats, that they would be unlikely to do it.”

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Bonamo reported in Elizabeth for New Jersey Monitor, part of States Newsroom. Quinlan reported from Washington.

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Home mortgage rates are posted outside a real estate office in Los Angeles after the Federal Reserve interest rates announcement on Wednesday, Sept. 18, 2024. Federal Reserve Chairman Jerome Powell announced a half-point cut to its benchmark interest rate in the first rate cut since the early days of the COVID pandemic.

The Federal Reserve’s first key interest rate cut in four years coincides with another major four-year event: the homestretch of the presidential election.

Fed Chair Jerome Powell downplayed the central bank’s role in the race between Vice President Kamala Harris and former President Donald Trump on Wednesday, in announcing the half-percentage point cut in its benchmark rate. But that didn’t stop the candidates’ campaigns from weighing in, and it could prove a key factor for voters.

“This is my fourth presidential election at the Fed, and it’s always the same. We’re always going to this meeting in particular and asking what’s the right thing to do for the people we serve,” Powell said. “Nothing else is ever discussed.”

The decision to cut for the first time during the Biden Administration indicates the Federal Reserve’s Board of Governors believe the economy has beaten the COVID-19 pandemic-induced wave of inflation that has plagued it since mid-2021. The Fed hiked its key rate 11 times between March 2022 and July 2023.

Inflation peaked at 9.1% in June 2022. The Consumer Price Index, a measure of inflation, rose 2.5% over the past year, according to the latest release from the Bureau of Labor Statistics in August. The unemployment rate was 4.2% in August, down from 4.3% in July, but still much higher than 3.5% in July 2023 when the Fed made its last rate hike.

“We now see the risks to achieving our employment and inflation goals as roughly in balance, and we are attentive to the risks of both sides of our dual mandate,” Powell said.

Wednesday’s was the first in what is expected to be a series of key rate cuts. For now, that benchmark rate is 4.75 to 5%

One member of the Fed’s governing board, Michelle Bowman, dissented with the rest of the group, marking the first time a governor has done so since 2005. Bowman preferred a 25 basis point – or quarter percentage point – cut.

Timing of the rate cut

Both campaigns quickly reacted to the news from the Fed.

Trump, speaking at a crypto-themed bar in New York, said the cut should have been smaller.

“I guess it shows the economy is very bad to cut it by that much, assuming they’re not just playing politics,” the Republican nominee said. “The economy would be very bad or they’re playing politics, one or the other. But it was a big cut.”

Harris, in a prepared statement, was forward-looking.

“While this announcement is welcome news for Americans who have borne the brunt of high prices, my focus is on the work ahead to keep bringing prices down,” the Democratic nominee said. “I know prices are still too high for many middle class and working families.”

Sarah Binder, a senior fellow in governance studies at the nonpartisan Brookings Institution and author of, “The Myth of Independence: How Congress Governs the Federal Reserve,” said there is a long history of presidents pressuring the Fed, from John F. Kennedy to Richard Nixon and Trump, as a president and now as a presidential candidate.

In order to be effective in its role in keeping the economy moving, Binder said, the Fed needs to be trusted as legitimate, and its political support is contingent on doing a good job.

“The Fed doesn’t have the liberty of sitting it out or not doing enough, which can also bring the Fed into politicians’ crosshairs where they really, really don’t want to be,” she said.

Skanda Amarnath, executive director of Employ America, a research group that advocates for full employment, said the Fed should be examining the economic data.

“That’s what they should look at, not where they are in the electoral seasonal cycle,” she said. “I think that’s the case, by and large. I don’t see anything that’s just a real politicization here.”

What a Fed rate cut means for the economy

Many economists and economic advisers have argued for the Fed to cut rates for months to avoid significant damage to the labor market and in the worst case, a recession.

Now, consumers should begin to see lower costs for borrowing money to buy houses, cars and other necessities.

Kitty Richards, senior strategic adviser at Groundwork Collaborative, a progressive think tank based in Washington, D.C., said the Fed should not hold back on cutting rates now that inflation is slowing.

“The Fed pursued four back to back 70-basis-point rate hikes when inflation was heating up. There’s no reason they should allow inertia to hold them back from normalizing rates now that inflation is under control,” she said.

Because shelter makes up so much of inflation, Richards has expressed concern that by keeping rates where they are, mortgage rates have been pushed so high that the housing market is unaffordable for many Americans. This, in turn, affects inflation, she said, creating a vicious cycle.

Dean Baker, senior economist at the Center for Economic and Policy Research, a progressive economic policy think tank, stated that the Fed decision is a good sign for the housing market.

“It is good that the Fed has now recognized the weakening of the labor market and responded with an aggressive cut. Given there is almost no risk of rekindling inflation, the greater boost to the labor market is largely costless,” Baker said in a statement. “Also, it will help to spur the housing market where millions of people have put off selling homes because of high mortgage rates.”

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Porchá Perry demonstrates with other workers in Lansing, Michigan, in favor of bills restoring local control to pass workforce and labor policies on Sept.13, 2023. A new report finds growing union organizing across the country has triggered an anti-labor legislative response in some states, but cities and counties are increasingly pushing back. (Photo courtesy of SEIU Local 1)

Growing union organizing across the country has triggered an anti-labor legislative response in some states, but cities and counties are increasingly pushing back, a new report found.

The report, released this month by the New York University Wagner Labor Initiative and Local Progress Impact Lab, a group for local elected officials focused on economic and racial justice issues, cites examples of localities all over the U.S. using commissions to document working conditions, creating roles for protecting workers in the heat and educating workers on their labor rights.

In the face of increased worker organizing and Americans’ higher approval of labor unions in the past few year (hitting levels not seen since the 1960s), many states have introduced bills aimed at stopping payroll deduction for union dues and punishing employers that voluntarily recognize a union through the card check process. In April, several governors in Southern states, including Tennessee, Alabama, Georgia, and Mississippi, advocated against auto workers voting for a union.

“We know that there has been an increase in worker organizing and definitely an increase in high-profile worker organizing and certainly that action has had a reaction,” said Terri Gerstein, director of the NYU Wagner Labor Initiative and co-author of the report.

However, state preemption laws, which can make local ordinances void and could prevent many localities from implementing more worker-friendly policies, are also on the rise. There was a surge in preemption laws from 2015 to 2017 on everything from the minimum wage to paid leave, according to a June 2024 analysis from the Economic Policy Institute, a left-of-center think tank.

Although the passage of preemption legislation has slowed, according to the EPI analysis, the effects on localities are still damaging to workers’ rights, authors of the report explain. But labor and policy experts say there are still opportunities for localities to push back against efforts to limit labor organizing and gut the enforcement of labor protections.

“Localities are doing more to fight for working people and advance workers’ rights, and I think in states where there is rampant state hostility and abusive state preemption, local governments are also the leaders of trying to advance workers rights in those states and address new challenges and threats like heat, for example,” said the report’s other co-author, LiJia Gong, the policy and legal director at Local Progress.

Some business organizations, such as the National Federation of Independent Business, say preemption laws help small businesses, which don’t have the capacity “to navigate duplicative, overlapping and potentially contradictory local labor laws.”

“NFIB has supported legislation that creates statewide, uniform standards for minimum wage rates and legislation that establishes a preemption of paid sick leave proposals by local governments,” the group said in a prepared statement.

Gerstein and Gong argue that these efforts are not always concerned with uniformity, such as taking away a locality’s ability to raise the minimum wage when the state does not set a higher minimum wage itself.

In states where there isn’t state-level wage enforcement, localities can pass ordinances that allow workers to file complaints and get stolen wages back without a lawyer, as some Florida localities have done.

There are also things cities and counties can do to prevent heat-related injuries and illnesses, including in the workplace. Miami-Dade County, Phoenix, and Los Angeles have chief heat officers whose role it is to protect people from the effects of extreme heat.

“Unlike a lot of other hazards, people don’t really understand how dangerous workplace heat is and that there are workplace fatalities. But research also shows that there are high rates of worker injuries and accidents of various kinds on hotter days,” Gerstein said.

Amid state efforts to weaken child labor laws, schools are also some of the best tools localities have to ensure kids aren’t working in dangerous conditions, the authors said. School boards could use their power to include workers’ rights education in the curricula, for example.

“School districts can do a lot to educate families on child labor laws and age-appropriate employment opportunities, and they can also play an important role in identifying students who might be working in prohibited occupations and refer those cases to state and federal labor enforcers,” Gong said.

Worker boards can also document and seek to improve working conditions on the local level. The boards, created by local governments, have worker representation and can conduct worker outreach and make policy recommendations on wages and benefits. Last year, the Detroit City Council voted to create an industry standards board for workers at pro sports facilities including Ford Field, Little Caesars Arena, and Comerica Park.

Board member Porchá Perry, a mother of two children who works at Comerica Park and Ford Field, said her role is reaching out to workers to share their experience of working conditions. Workers say they are concerned about low wages, child care, transportation and safety. Perry said that although she is personally less concerned about finding child care, she wouldn’t have to work multiple jobs if wages were higher and she would be able to see her kids more.

“It’s hard to have quality time,” she said.

The board also has spots for city council members and the mayor’s office.

“It’s a voice for everybody – government officials, employees, the management department. It’s somewhere for everybody to sit at the table and speak,” she said.

Britain Forsyth, legislative coordinator for Step Up Louisiana, a group that organizes for economic and education justice, said New Orleans has focused on becoming a model employer. New Orleans increased the minimum wage to $13.25 for city employees, which became effective in 2022, and rose to $15 in 2023. In 2023, the New Orleans City Council codified city employees’ right to organize. Louisiana does not have a state minimum wage law, so the city’s minimum wage is far above $7.25, the federal minimum wage.

Step Up Louisiana is also working to pass a workers’ bill of rights on the November ballot in New Orleans. It would add to the bill of rights in the city’s home rule charter that workers deserve a living wage, paid leave, safe workplaces and health care coverage and says that all laws and regulations regarding unions should be respected.

“We call the question to the city about what we believe in, and we make it clear to employers here and folks who want to open businesses here that this is how we think workers should be treated,” he said.

Authors of the report also suggest that more localities should take on wage theft, since state and federal authorities frequently struggle to enforce wage judgments and recover wages.

These agencies are often under-resourced, have frequent staff turnover and manage complex cases, Gerstein said. Local labor agencies could provide help conducting interviews or prepare cases for state or federal agencies to follow up on. San Diego County has a fund for staff to pursue employers for wages and provides $3,000 to people who are victims of wage theft and have final unpaid wage orders from the state.

Gerstein said she’s seeing cutting-edge approaches to enforcing worker protections in places like Seattle, Boston, New York City and Denver, where the state is friendlier to workers. For example, in Sept 2022, Boston Mayor Michelle Wu created the Worker Empowerment Cabinet, including the Office of Labor Compliance and Worker Protections.

Jodi Sugerman-Brozan, Boston’s deputy chief of worker empowerment and the director of the office of labor compliance and worker protections, said her office has done educational outreach, including free OSHA training sessions for over 1,200 people and a set of trainings for how to create a heat illness prevention plan. Last year, Wu signed an ordinance that requires certain safety standards and training for city construction projects.

“Cities and countries don’t have a lot of power but they can use the power of contracting and vending to drive labor standards,” Sugerman-Brozan said.

But Gerstein added that local governments in more employer-friendly states are also stepping up to advocate for workers.

“It’s a very different landscape where the local government may be the only place where the government is standing up for workers,” she said. “There is largely stagnation in Congress because of the filibuster and other reasons, an unfriendly state government, and your state department of labor isn’t particularly worker protective and is more focused on being employer and business-friendly. State AG offices aren’t really doing anything.”

Even a small local office can make a difference, Gerstein said.

“Hire dedicated staff to be the worker rights person. Create an office and an army of one. That’s how these things can start.”

Inflation is cooling off but the price of housing among other essential items remains high. (Photo by Spencer Platt/Getty Images)

Inflation hit a three-year low last month, just as the presidential election is heating up.

But the high cost of housing and other necessities will keep the economy central to both of the major campaigns, as seen this week in the first debate between Kamala Harris and Donald Trump.

The Consumer Price Index, a measure of inflation, rose 2.5% in the past year, which is the smallest jump since February 2021, according to the latest Bureau of Labor Statistics data released Wednesday. The main driver of this increase was shelter, which moved up 0.5% in August. Airline fares, car insurance, education, and apparel also rose that month. But wages also rose 0.4% in August and 3.8% over the past year, and the average workweek increased by 0.1 hour — welcome news for workers trying to keep up with the cost of living.

Voters continue to say the economy is key in deciding who should be president, at 81%, and four in 10 say the economy and inflation are the most important issues guiding that  decision.

Trump, the former president and Republican nominee, blamed the Biden administration for high prices early on Tuesday’s debate in Philadelphia, falsely claiming the post-pandemic wave of inflation is the worst ever.

“We’ve had a terrible economy because inflation, which is really known as a country buster, it breaks up countries, we have inflation like very few people have ever seen before, probably the worst in our nation’s history,” Trump said.

The worst inflation rate in U.S. history was actually in 1980, at 14%. The current wave – the highest inflation spike since then – peaked at 9.1% in June 2022.

Democratic nominee andVice President Harris responded to Tuesday’s question about the economy by touting tax cut proposals to combat housing costs.

“The cost of housing is far too expensive for far too many people. We know that young families need support to raise their children and I intend on extending a tax cut for those families of $6,000, which is the largest child tax credit that we have given in a long time so that those young families can afford to buy a crib, buy a car seat, buy clothes for their children,” she said.

Harris also pitched a proposal for a $50,000 tax deduction for small startup businesses.

Taylor St. Germain, an economist at ITR Economics, a nonpartisan economic research and consulting firm based in New Hampshire, said the latest data shows inflation is slowing enough to suggest it’s time for the Federal Reserve to start cutting interest rates.

“It’s encouraging to see that inflation is slowing and slowing to these much lower levels,” said St. Germain said. “However, it is, of course, still elevated and one of the reasons it’s still elevated is that shelter costs are driving a significant portion of that inflation, with rents rising as well, especially as we looked at this latest CPI report.”

The Fed began raising interest rates in March 2022 to bring down inflation, raising interest rates 11 times, and made its last rate hike in July of last year.

Economists are watching closely to see if the Fed cuts rates during its meeting next week, which is expected to have an impact on the housing market and other costs.

Kitty Richards, senior strategic advisor at Groundwork Collaborative, a progressive think tank based in Washington, D.C., said the Fed’s decisions are contributing to housing costs.

“The problem with housing is fundamentally a supply problem. And the Fed’s actions are actually making that supply problem worse by locking up the housing market and making it more expensive to buy, build or rehab housing,” she said. “Housing is such a big part of people’s experience of the economy and it really matters to folks when they might want to move and look around and they can’t. They can’t even afford to buy a house that is the same price as the house they live in because the interest rates are so high.”

This story has been updated to correct Kitty Richards’ title. She is senior strategic advisor at Groundwork Collaborative.

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