Could a recession be the October surprise that changes the election outlook?

It would be bad news for Kamala Harris. The economy, as always, is the top issue for voters, and a further jump in unemployment, which has already bounced up to 4.2 percent from 3.7 percent this year, would not help her chances of winning.

It would certainly be a surprise, because investors and economists today are almost unanimous believing we are in for a “soft landing.” The betting is that the Federal Reserve will manage to bring interest rates down and continue the push to reduce inflation, all while avoiding a recession.

The problem is that that has almost never happened.

Even ISI Evercore’s Ed Hyman, who has been warning of a downturn for more than a year, has thrown in the towel. Over the last couple of years, Hyman has been on the lookout for a recession, citing an inverted yield curve, declining leading indicators and, of course, rising interest rates.

Hyman has been ranked the No.1 economist by Wall Street for 43 of the last 48 years. He has earned that astonishing distinction by being right more than wrong, and also by responding to incoming data by updating his forecasts. That is what he is doing now, and he is doing so reluctantly.

Hyman recently wrote to clients: “History and experience say to stick with a hard landing outlook. However, the hard math that our team has reviewed says flip to a soft landing outlook.” But he doesn’t sound entirely convinced: “To say this is a difficult decision........

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