The 2 dates that could sink Kamala Harris’ campaign — outside of tonight’s debate

Poor jobs data for September or October could hurt Kamala Harris’ campaign as the recession fears grow.

Tonight’s presidential debate between Vice President Kamala Harris and former President Donald Trump could prove to be a pivotal moment in the tight race for the White House. See: June’s debate between Trump and President Joe Biden.

But there are two other dates before the election that could also impact its outcome: October 4 and November 1.

Those are the days when the Bureau of Labor Statistics will release the jobs reports for September and October. Monthly payroll reports like these tend to fly under the radar and don’t generate enough attention to make waves in the broader news landscape. Right now, however, many fear that the economy is on the verge of recession, and labor-market data is front and center for economists and investors.

That’s because recent jobs data has shown weaknesses emerging. In August, the economy added 142,000, which was below expectations for 164,000. July’s data was also revised down to 89,000 jobs added, well below the original report of 114,000. The BLS also recently said that it overestimated the number of jobs added from March 2023 to March 2024 by over 800,000. And over the last 12 months, jobs data has been overstated in 80% of initial reports, according to economist David Rosenberg.

As a result, Federal Reserve Chairman Jerome Powell has said the central bank does not want the labor market to soften any further, and that policy changes are coming. The Fed is widely expected to cut interest rates at its meeting next week in a bid to restimulate the economy, and markets expect they will continue to do so in the months ahead.

If the labor market does show significant signs of weakness in the two months ahead, it could mean trouble for Harris’ campaign, given her attachment to the current administration.

A poor payrolls print would likely cause recession fears to surge, which could fuel further weakness in the economy. History shows that once labor market data trends enough in the wrong direction, it can spiral out of control quickly.

Here’s the Sahm Rule recession indicator, which says that the US economy is in recession when the three-month moving average of the unemployment rate moves up by 0.5% from 12-month lows. It hit 0.57% after August’s unemployment report was released last week. When it has crossed 0.5% in the past, it has usually shot up rapidly even further.

What’s more, a jobs report that’s weak enough could kick off a stock-market sell-off. When jobs numbers came in lower than expected for July and August, the S&P 500 fell. With recession concerns higher now than a couple of months ago, a sell-off could be more pronounced, especially if the report is below expectations by a wide-enough margin. Plus, household equity ownership is at an all-time-high, meaning Americans’ wallets would be more sensitive to a significant market decline.

According to Pew Research data published on Monday, 81% of voters list the economy as their top issue. Reuters/Ipsos poll data shows 75% of independent voters count it as their top concern.

It’s likely a big reason why Joe Biden’s approval rating has been so low. Confidence in his ability to oversee the economy plummeted alongside the inflation flare-up of 2021 and 2022, Gallup data shows.

Stock-market performance in election years also highlights this tendency of elections to be decided by the economy and Americans’ personal finances. According to LPL Financial, the incumbent party has won 83% of presidential elections when the S&P 500 has risen in the three months before election day. They’ve also lost 89% when the market drops during that period.

So, a suddenly flailing labor market in the coming months — and the stock-market drop that would probably come with it — could be a roadblock for Harris’ path to the White House.

Still, it’s unclear how much voters would tie negative jobs numbers to Harris, as she’s not currently at the helm and didn’t appoint Powell as Fed chair. A recent Financial Times/University of Michigan poll showed Americans actually trust Harris more on the economy than they do Trump.

If anything could derail that perception enough to impact the election, though, it very well could be a jobs report that’s weak enough to signal the economy is plummeting into a downturn.