The Best News Kamala Harris Got This Week Had Nothing to Do With the Debate

While most voters and pundits agreed that Vice President Kamala Harris emerged as the winner of Tuesday’s debate with former President Donald Trump, the best news Harris received this week came from a series of economic data points that, taken together, suggest the country has finally turned the corner in the years-long fight against inflation.

With the economy still the top concern for voters ahead of Election Day, the Bureau of Labor Statistics reported on Wednesday that the Consumer Price Index (CPI), considered the gold standard of inflation readings, rose by just 0.2% in August, bringing annual inflation down to 2.5% — its lowest level since early 2021.

Economists had predicted a slight easing of inflation, but the decline exceeded expectations, offering a measure of relief to millions of Americans grappling with rising costs.

Additionally, new consumer sentiment data from the University of Michigan this week shows that Americans’ outlook on the U.S. economy has improved for the second consecutive month, to a four-month high.

Donald Trump has consistently blamed President Joe Biden—and now Kamala Harris—for causing inflation with aggressive federal spending during the pandemic, frequently using rising prices as a central point of attack in his campaign.

Polls indicate this message resonates with voters, with more Americans trusting Trump over Harris on economic issues, especially as food prices remain 21 percent higher than they were three years ago. According to the latest New York Times/Siena College poll, Trump led Harris by 13 points on the economy, which helps explain why she was only ahead by a single point nationally.

But with inflation levels coming down close to where the Federal Reserve wants them to be — and the central bank expected to begin an aggressive interest-rate-cutting cycle starting next week — it’s an attack line that could soon become neutralized.

“With inflation easing to more ‘normal’ levels, Trump is losing one of his main arguments against Harris. I expect this could shift undecided voters in her favor,” said Luis Cabral, a professor of economics at New York University.

Wednesday’s CPI report from the Labor Department marked the fifth consecutive annual price decrease and the smallest increase since February 2021. Month-over-month, prices rose by just 0.2%.

For months now, cooling inflation has gradually eased the burden on American consumers, who were hit hard by price shocks starting in the heat of the pandemic three years ago, especially in essentials like food, gas, and rent. Inflation reached a peak of 9.1% in mid-2022, the highest level in four decades.

While core inflation—which strips out the more volatile categories of food and energy—remained slightly higher at 3.2%, the overall decline is enough for the Fed to start cutting interest rates, as it has forecast it will now do. As a result, Americans’ outlook on the economy has improved for the second consecutive month.

Rising consumer confidence often indicates a greater willingness to spend, even though Americans have maintained a steady pace of spending despite subdued confidence levels in recent surveys.

“Today’s report will add to confidence within the Fed that inflation is indeed on a sustainable path towards 2%,” the Fed’s target level, Carl Weinberg, chief economist at High Frequency Economics, wrote in a note to clients on Wednesday.

Meanwhile, the proportion of consumers expecting interest rates to drop within the next 12 months has surged to 54%, the highest level since records began in 1978. The Federal Reserve is expected to cut interest rates by at least a quarter-point in its meeting next week, which in turn will help bring down everything from the cost of a mortgage to the cost of an auto loan. In fact, those rates are already dropping like a stone in anticipation.

Here are some of the other positive inflation indicators you may have missed this week.

Online Grocery Prices See Largest Decline in Decade

Any American who has set foot in a supermarket over the last three years doesn’t need to be told that grocery inflation has been a major factor in rising living costs and a key issue in the presidential campaign.

Donald Trump and the Republicans have frequently highlighted that prices for staples like eggs and bacon have surged over the past three and a half years, with food costs still about 21% higher than three years ago.

But there are signs that the supermarket sticker shock is easing, too. This week, a report from Adobe Analytics found food prices dropped sharply in August, with online grocery prices falling by 3.7%. That is the largest monthly decline in a decade, providing some much-needed relief to households after years of pandemic-driven price increases.

“Though grocery prices are still slightly up year-over-year, the August drop suggests the worst of the inflationary pressure on food costs may be behind us,” Adobe reported. In 2022, grocery prices spiked by more than 14%, but the latest data suggests the inverse is now happening.

While this is undoubtedly good news for any incumbent administration, it might not be enough for voters to feel the impact on their wallets by November. As Professor Todd Belt from George Washington University told Newsweek: “Even though inflation is slowing, grocery bills are still high, gas prices remain expensive, and people are feeling the pinch.”

Shipping Container Rates Plunge to Record Lows

Another under-reported development that impacts both businesses and consumers alike is the record-breaking drop in shipping container rates, with early September seeing the fastest decline ever recorded.

Commodities strategist Ole Hansen noted this “biggest one-week drop in container rates in history.”

This decline is a welcome sign for retailers and importers, as lower shipping costs translate to a reduction in the price of freight and goods. Improved supply chain conditions and lower global demand have contributed to this drop, with shipping rates plunging by up to 60% year-over-year on key trade routes, according to the logistics and supply-chain outlet Loadstar.

The trend is expected to benefit consumers through cheaper goods, thus helping to ease inflation.

The drop follows a period of extreme price volatility, where shipping rates spiked to over $20,000 per 40-foot container during the pandemic, before falling to around $1,200 by mid-2023.

Disney Slashes Streaming Prices

While lowering the price of entertainment may not be part of either candidate’s political platform, the media giants that control the most popular streaming services have begun adjusting their pricing strategies to attract new subscribers.

This week, Disney slashed the price of its ad-tier streaming service to just $1.99 per month for new and returning customers. The promotion, available through September 27, offers three months of service, delivering $18 in total savings during that period.

The discounted rate comes as inflationary pressures on discretionary spending ease.

Of course, this discount comes right after Disney+ announced yet another price hike — the fourth in just five years. Originally priced at $6.99, the ad-free tier is now $15.99, more than double what it was in 2019.

Netflix, meanwhile, has seen huge success with its gambit of adding a low-priced, ad-supported tier, with some 40 million subscribers choosing that option as of May.

McDonald’s Extends $5 Value Meal

Despite inflation easing and prices dropping, many people are still choosing to eat at home — a trend that has started to eat into the profit margins of many fast food and fast casual chains.

As a result, McDonald’s said this week it is extending its $5 value meal through December at most U.S. stores, a move that competitors are likely to follow.

After a disappointing first quarter that saw fewer U.S. visits and lower spending per order, McDonald’s introduced the deal in June, targeting customers earning less than $45,000 per year.

“Together with our franchisees, we’re committed to keeping our prices as affordable as possible,” McDonald’s U.S. President Joe Erlinger said Thursday.

It’s the second time the Golden Arches has extended the deal, which was originally only set to last a month.

Sub-$3 Gas, Coming Soon to a Pump Near You?

Crude oil futures are trading around their lowest level since December 2021, signaling that the national average price for gasoline — currently $3.23 — could soon break below $3 per gallon.

Sluggish economic data from China and news this week that OPEC would lower its demand forecast for the second time in two months have contributed to the bottom falling out of oil futures, which is likely to translate to lower prices at the pump​.

Bob Yawger, executive director of energy futures at Mizuho Securities, said in a note to clients on Tuesday that China and OPEC delivered a “knockout blow” for the oil sell-off, coming despite a hurricane in the Gulf of Mexico that would typically spike futures.

If this trend continues and isn’t stunted by geopolitical developments — a big if, given the unrest in the Middle East — the drop in gas prices will relieve pressure on the cost of transportation and goods, likely just in time for the election.

Those weren’t the only data points pointing to a booming economy.

A Census Bureau report released Tuesday found inflation-adjusted median income of U.S. households rebounded last year to roughly its 2019 level. The S&P 500 ended the week close to an all-time high, while 30-year mortgage rates are at their lowest since early 2023 ahead of next week’s Fed decision. And the average net worth of an American household climbed to a record, the Fed said this week, on the back of a soaring stock market and high home values.

With the Harris campaign riding high off Tuesday’s debate, and the first post-debate polls showing a small but not insignificant bump for the Democratic nominee, her real momentum heading into the teeth of the election season could come from these disparate but related pieces of positive economic news — so long as she can articulate them to the American people.