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Trump and Biden spar over state of economy in final days of race

Donald Trump and Joe Biden sparred over the president’s stewardship of the US economy after a sharp rebound in third-quarter output brought the split over jobs and growth back to the centre of the race for the White House.

With five days to go before November 3, when polls will close across the US, Mr Trump and Mr Biden took their fight over the economy to duelling rallies in the populous — and crucial — swing state of Florida.

Mr Trump had hoped to focus his re-election campaign on a strong economy before the coronavirus hit, but the pandemic shattered those plans and forced him on the defensive on his most favourable terrain.

The US president, however, received a boost on Thursday after the US commerce department reported that gross domestic product grew at an annualised rate of 33.1 per cent in the third quarter, reflecting a rapid snapback from the initial lockdowns.

Even though the world’s largest economy has still not recovered to pre-pandemic levels of output and employment, Mr Trump used the opportunity to tout the “explosive” growth under his watch between July and September.

There’s probably not enough time for the good economic news to be a game-changer

Dan Eberhart, a Republican donor to Donald Trump

“We are doing great. Did you see the number today? 33.1 GDP,” Mr Trump said in Tampa, along the Gulf Coast. “We locked down, we understood the disease, and now we are open for business.”

Mr Biden responded while campaigning in Broward County, north of Miami. The former vice-president has criticised Mr Trump for mishandling the coronavirus response and said that failure deepened America’s economic pain, leaving millions of people unemployed. He also attacked Mr Trump for being unable to provide more government relief to struggling households and businesses, since talks between the White House and Congress over new fiscal stimulus are stalled.

“I’m not going to shut down the economy, I’m not going to shut down the country, but I am going to shut down the virus,” Mr Biden said. “When Barack [Obama] and I left office, we left Donald Trump a strong economy . . . and just like everything else he inherited, he blew it.”

Mr Biden is ahead by 8.6 points nationally, according to an Financial Times analysis of RealClearPolitics data and holds a lead in several of the battleground states that will decide the election, albeit by smaller margins.

As well as promoting the economic rebound, Mr Trump also criticised Mr Biden’s plans, which include tax increases on higher-income households to fund more government spending and investment. “You will have a crippling depression the likes of which you have never seen if Sleepy Joe becomes your president. And your 401(k)s [private pension plans]: throw them out the window, because you know what is going to happen,” Mr Trump said.

Line chart showing how Trump and Biden are doing in the US national polls

Mr Biden defended his approach during his rally. “All we’re going to ask is that the wealthiest among us and the major corporations just begin to pay their fair share,” he said. “What he’s forgotten [is that] when you all do better, everybody does better.”

A number of private economists, including Moody’s and Oxford Economics, have said Mr Biden’s spending plans could deliver faster growth compared with Mr Trump’s, which are based on more tax cuts and deregulation.

Voters have scored Mr Trump more favourably on the economy during most of the campaign, which makes it his best argument in the final days of the race. However, some surveys suggest he is losing his edge on this issue, including the latest FT-Peterson poll, which found a majority of voters thought his policies were hurting, rather than helping, the economy.

“This economic cake is unlikely to sweeten Trump’s election chances,” Beacon Policy Advisors wrote in a note on Thursday. “That’s because the GDP number will be competing with several other storylines in the final days of the campaign, namely, the spike in Covid-19 cases, especially in battleground states like Wisconsin.”

Some Republican strategists still believe Mr Trump could rally his base and sway the few remaining undecided voters with a more consistent message on the economy in the closing days of the campaign.

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“People are going back to work in a lot of places in the swing states. And that’s what’s going to help the president win re-election,” said John Feehery, a Republican strategist and former congressional aide. 

Doug Holtz-Eakin, a former economic adviser to John McCain’s 2008 presidential campaign and the president of the American Action Forum in Washington, added: “We’ve got cases spiking around the globe and he’s talking about opening things up more, and I actually think that’s quite rational in terms of what the polls are telling him. That’s what people want to talk about.”

Other Republican strategists doubted the new economic data would make a difference. Dan Eberhart, a Republican donor to Mr Trump, said while the GDP numbers appeared to validate the president’s promise of a “V-shaped recovery”, they may have come too late in the campaign to help Mr Trump.

“We’ve got six days until the election and a lot of people have already voted,” Mr Eberhart said. “He’s made the economy a central tenet of his campaign for re-election. But this is really a contest about his popularity. There’s probably not enough time for the good economic news to be a game-changer.”

Whit Ayres, a veteran GOP strategist, also played down the potential affect of the positive numbers this late in the election cycle.

“Most voters understand that the economy will never get back to where it was until we get the virus under control. It’s simply common sense that nothing will return to normal while we’re hitting a record number of new Covid cases on a daily basis,” Mr Ayres said.

Additional reporting by Lauren Fedor

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