Can Betting Markets Predict the U.S. Presidential Election?
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U.S. job growth took a hit last month. The Labor Department's report comes just days before the presidential election and the Fed's interest rate meeting. Even coming into the report, the expectation was that the Fed is going to cut rates by a quarter point. That's still the expectation. And are betting markets more accurate than polls when predicting who will win the presidential election?

Plus, Iran signals it might strike back at Israel, raising the risk of a wider Mideast war. It's Friday, November 1st. I'm Tracey Hunt for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

U.S. job growth slowed sharply last month, with the Labor Department today reporting that the economy added a seasonally adjusted 12,000 jobs in October versus a September gain of 223,000. That wildly misses even the muted expectations of economists who had forecast 100,000 jobs. Still, the unemployment rate stayed steady at a historically low 4.1%.

Hurricanes Helene and Milton put thousands of people out of work across the Southeast, while the Boeing strike took more people off the job. Justin Layhart is a reporter for The Wall Street Journal, and he joins us now. Justin, was this slowdown expected? Economists really have been thinking that job growth was due to slow, that the

The economy can't sustain as fast a pace of job growth as it was, say, a year ago. The population isn't growing fast enough. We're also an aging population. And more recently, the influx of immigrants that we saw that helped boost the supply of available workers, that's been curtailed.

So people aren't really sure exactly what the right number of jobs per month is. Something like 100,000 to 150,000 seems right. If employment runs hotter than that, then you run the risk of wage growth picking up and then the Federal Reserve wouldn't be able to reduce rate of return.

rates as much as they think they're going to. Speaking of the Fed, they meet just after the election next week. How could this data factor into its decision on interest rate cuts? Even coming into the report, the expectation was that the Fed is going to cut rates by a quarter point. That's still the expectation.

Fed officials aren't allowed to talk because they're in what's called a lockup period ahead of their meeting. But prior to the lockup period, Fed Governor Waller said, hey, look, these hurricanes, this Boeing strike, I think it's going to take at least 100,000 jobs out of the jobs report. So they were ready for this. This isn't unexpected. This jobs number was distorted.

And there's going to be sort of distortionary effects on the next jobs report and then also on some other economic data. And this is going to continue for a while. So it's going to be very hard for central bankers to get a read on exactly what's going on with the economy for the next couple of months.

Justin Layhart is an economics reporter for The Wall Street Journal. Former President Donald Trump wasted no time in seizing on the low payrolls number. His campaign called it a catastrophe and said it reveals, quote, how badly Kamala Harris broke our economy. The Council of Economic Advisers, which advises the White House, pointed to the still low unemployment rate and said that the economy added about 2.2 million jobs over the past year. ♪

In U.S. markets, the tech-heavy Nasdaq Composite Index rose 0.8%, the S&P 500 added 0.4%, while the Dow advanced 0.7% or 289 points. U.S. intelligence agencies today blamed Russia for a fake viral video purporting to show a Haitian immigrant with multiple IDs claiming to have voted several times in Georgia. In a joint statement, the Office of the Director of National Intelligence said,

Federal Bureau of Investigation, and Cybersecurity and Infrastructure Security Agency said the judgment was based on intelligence information. It's the second time in a week the agencies have rapidly attributed a fake video seeking to undermine confidence in their election process to Russia. Last Friday, the agencies called out a video purporting to show ballots being ripped up in Pennsylvania.

Coming up, can betting markets be trusted when it comes to predicting the next president? That's after the break.

I'm Jimmy Veilkind from The Wall Street Journal, and I'm hitting the road again for a new series on the election, looking at how big campaign arguments are playing out on the ground. Like, how's the economy shaping people's thoughts? My daughter went a lot further when Trump was in there. And how is Kamala Harris's sudden rise being received? She's already proven herself to be a formidable opponent for Trump. Join me for the ride.

Look for Chasing the Vote in The Wall Street Journal's What's News feed. Betting markets show former President Donald Trump has a roughly 60% chance of beating Vice President Kamala Harris next week. But should they be trusted?

History suggests that betting markets have generally been good forecasters of U.S. elections. More often than not, the presidential candidate with the best odds before Election Day goes on to take the White House. But there have been some glaring exceptions.

Wall Street Journal reporter Alexander Osipovich joins us now to discuss betting markets and the presidential election. So Alex, are betting markets more accurate than polls? The proponents of betting markets say that they're more accurate than polls, and they point to the fact that polls have missed a number of occasions recently, the 2016 election being a good example. But by and large, most of the time, betting markets have gotten it right.

But the problem is that they often take their cues from the polls. So in 2016, betting markets were predicting that Hillary Clinton was going to win just like the polls were. And as we know, Trump ended up winning that election.

And so how do betting markets play into the upcoming election? So it was recently revealed that a large trader or group of traders was bidding up the price of Trump shares on PolyMarket, which is a popular offshore betting platform that has gained a lot of attention in this election cycle, essentially placing around $30 million worth of bets and having a huge impact on the market, driving

The apparent odds of Trump winning from around 50-50 at the beginning of October to north of 60%

And this raised a lot of questions. Fans of Donald Trump are more willing to buy what the prediction markets have been saying, while people who are more on the left and supportive of Kamala Harris have raised questions about manipulation and pointed to past examples where betting markets have been inaccurate. One of the criticisms of betting markets is that their users tend to be more young and male than the general population. Polymarket

is based on crypto and a lot of its users are what might be termed crypto bros who tend to lean right or at least libertarian and often favor Donald Trump.

Who's betting? Is it Americans or players from abroad? The biggest betting markets are offshore right now for regulatory reasons. There are only two recently legalized markets for betting on elections within the U.S. And the offshore markets are, in theory, off limits to Americans. But there are potentially ways to circumvent that. And that, of course, has an impact on who's trading there and how they view the markets.

Alexander Osipovich is a reporter for The Wall Street Journal. Thank you so much, Alex. All right. Thank you so much.

And that so-called whale trader who bet more than $30 million on a Donald Trump victory? Well, he was revealed today to be a Frenchman who had previously lived in the U.S. and worked as a trader for banks. Speaking exclusively to the Journal, he said he isn't trying to manipulate the U.S. election. The trader declined to give his real name, and the Journal wasn't able to confirm all the elements of his story.

For our multi-part series, Chasing the Vote, Wall Street Journal reporter Jimmy Vielkind has been traveling to the states that will decide the presidential election to find out what matters to voters. For our last episode, Jimmy went to Pennsylvania, where immigration is among the top issues for voters on both sides of the aisle. And Jimmy joins us now to talk about what folks there think about Kamala Harris's and Donald Trump's immigration plans. So, Jimmy, why is immigration such a big issue for Pennsylvania?

Well, there are two real reasons. The first is that particularly in areas of eastern Pennsylvania, like the Lehigh Valley, the demographics have really shifted in the last several decades. I did a lot of reporting in Allentown, which is Pennsylvania's third largest city, and it now has a majority of Hispanic residents. And then the other reason that immigration is such an important topic in Pennsylvania is that we're

Republicans, as they have everywhere in the country, have really pushed it at the center of campaign messaging this cycle. So what are people in Allentown thinking about immigration?

It's really a mixed bag. I met some people who were immigrants who felt that Democrats should do a better job of leaning into their stories, of embracing immigrants for their economic and cultural contributions to the United States. Other voters who were born in the U.S. but came from families that immigrated in decades past, they said they had a lot of empathy for current immigrants and current asylum seekers and felt that there should be some process that would allow them to stay.

However, they also looked at the situation at the border and thought this is somewhat out of control and there needs to be a better process and better vetting and, frankly, just a more orderly system involved here. Jimmy Veilkind is a political reporter for The Wall Street Journal. You can listen to his report from Pennsylvania in our Chasing the Vote podcast this Sunday. Thanks, Jimmy. All right. Thanks, Tracy.

And finally, Iran is signaling it will respond to Israel's attack last weekend, which damaged Tehran's most advanced air defenses and killed four soldiers. The move would extend the cycle of violence between the two enemies and risk dragging the Middle East into a wider war. Iran initially downplayed the October 26 strike, which Israel aimed to calibrate to close out a series of direct attacks this year by the two sides.

But the nature of the attack is now prompting more definitive talk of an Iranian retaliation. Israeli officials also believe Iran is seriously considering a response and have warned they are willing to mount a far more aggressive attack in return.

And that's What's News for this week. Tomorrow, you can look out for our weekly markets wrap up, What's News and Markets. Then on Sunday, as we said earlier, Jimmy Veilkind talks to voters in Pennsylvania to find out what they think about Trump and Harris's plan for immigration policy. That's in the last episode of Chasing the Vote.

And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bien-Aimé with supervising producer Michael Cosmitas. Additional support this week from Trina Menino. Michael LaValle wrote our theme music. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Densley are our deputy editors. And Falana Patterson is The Wall Street Journal's head of news audio. I'm Tracy Hunt. Thanks for listening.