America's one-two punch of good economic news

A blowout jobs report this morning suggests the labor market is thriving, bucking fears that a recession is ahead. And the port strike — feared to cause widespread economic damage — is over.

Why it matters: These two risks have hung over the economy, with just weeks to go until the election, when economic sentiment is expected to sway voters.

• What they're saying: "Good news all around today for the frontline workforce," Edward Hearn, an economist at payroll processing firm UKG, wrote in a note.

The big picture: Last night, the dockworker union announced a tentative deal with the United States Maritime Alliance.

• Reports suggest the two parties agreed on a pay bump for workers of about 62% over the next six years. Economists had warned that without a speedy resolution, the strike could weigh on GDP and the labor market — and result in emptier shelves ahead of the holiday season.
• This contract will be extended until Jan. 15 — a possible problem for the next administration if a solution isn't reached.

Then came the rosy jobs report. For months, the labor market had been showing cracks. It turns out that was a statistical illusion.

• The economy added 254,000 jobs — the most since the start of 2024. The unemployment rate ticked down to 4.1% (unrounded: 4.051%).
• Adding to the upbeat report: Job gains in July and August were revised significantly higher, confirming the summer slowdown that worried economists didn't happen.

The bottom line: The economy isn't perfect, but it's still an enviable backdrop that includes somewhat cheaper borrowing costs and falling inflation.