It didn’t take long for former President Donald Trump to make a political weapon out of Monday’s market sell-off. “Stock markets are crashing, jobs numbers are terrible, we are heading to World War III, and we have two of the most incompetent ‘leaders’ in history,” Trump wrote in a post on Truth Social. “This is not good.”

The post underscored Trump’s long-standing fixation on stock indexes as a barometer of economic health. It also reinforced the degree to which economic messaging — and the health of the economy itself — will play a key role in the sprint finish before the presidential vote in November.

American voters consistently tell pollsters that the economy and consumer prices are the most important issues facing the country. The former president and his presumptive Democratic opponent, Vice President Kamala Harris, are seeking to sell voters on diametrically opposite stories about the economy’s health.

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Trump Wants Voters to Believe Economy is Collapsing

Trump wants voters to believe the economy is on the brink of catastrophe, and that Harris and President Joe Biden are to blame. He has joined a chorus of negativity that has in some ways worked: Polls have consistently shown that a majority of Americans believe the economy is in recession, even though economic statistics suggest it is not. Economic growth was surprisingly strong in the first half of the year. Job growth has remained relatively strong, even with the slowdown in job creation in July.

“This moment could set off a real economic calamity around the globe,” Sen. JD Vance of Ohio, Trump’s running mate, posted on the social platform X on Monday. “It requires steady leadership — the kind President Trump delivered for four years.”

(Trump’s presidency included a rapid descent into a pandemic recession in 2020, including a steep drop in the stock market that was followed by a rebound that summer.)

Harris has stressed economic optimism in speeches. “We believe in a future that keeps America’s economy the strongest in the world,” she said in Houston this month. “Where every person has the opportunity to build a business, to own a home, to build intergenerational wealth.”

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Unexpected events, such as a prolonged market downturn or a new set of encouraging economic stats, could sway some voters’ economic perceptions before the election.

So could the Federal Reserve. If officials at the central bank cut interest rates in September, they could help to push down borrowing costs for Americans buying homes, cars and other big-ticket items on credit — a move that White House economists have long believed could help reinforce the idea that inflation is under control and the outlook for consumers is improving. That could help Harris.

But many Democrats worry that the Fed, by holding rates steady last month, may have hurt Harris — by opening the door for the market sell-off, which appears to be driven in part by investors’ fears that Fed officials waited too long to start cutting rates.

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This article originally appeared in The New York Times.

By Jim Tankersley/Doug Mills
c.2024 The New York Times Company