Inflation slowed for second straight month, CPI shows

[junior chįmp]

Thats nice and all but inflation isnt really all that predictive of election outcomes

The absolute level of an economic variable usually doesn’t reveal as much as its change, and economic data late in the year prior to the election and early in the election year have the strongest relationship with the ultimate vote. Our economists find that some economic variables, including real consumption and real disposable income, are more predictive over a longer horizon. But the strongest statistical relationship with election outcomes is often with variables measured in the second quarter of an election year.

Inflation appears to be less predictive of election results than indicators related to growth or the state of the labor market. Headline inflation, in a sample going back to 1952, is weakly statistically significant as a predictor of election results, Phillips and Krupa write. Elections during periods of high inflation show a stronger relationship, but even in these elections, the signals provided by growth and labor variables are stronger.

Core inflation has an even weaker relationship with election results than headline inflation. “This is intuitive, as core inflation excludes items with the greatest salience for consumers in forming inflation expectations,” such as gasoline and groceries.

Although the good news for Biden is that first-term incumbency + no recession has always led to win in the GE in the post WW2 era.

This far in advance of an election, we have previously found that ‘fundamentals’ outweigh polling in predicting outcomes,” Goldman Sachs Research Chief US Political Economist Alec Phillips and economist Tim Krupa write. Polls a year before an election are not particularly reliable, with an average absolute error of nearly 10 percentage points since 1948.

First-term incumbency typically provides an advantage — unless there’s a recession during or just before the election. When there is no recession, the incumbent has always won in the post-World War II era. Goldman Sachs Research estimates a 15% probability of a recession over the next 12 months (equal to the average historical probability).

https://www.goldmansachs.com/intelligence/pages/us-president-incumbents-tend-to-win-elections-except-during-recessions.html#:~:text=As%20the%20race%20for%20the,according%20to%20Goldman%20Sachs%20Research.

[Kahane's Grave Is A Gender-Neutral Bathroom]

Let's be real, if Donald Trump was presiding over this economy, he'd have a 55% approval rating for handling the economy.

I mean, no, the economy was great during 2017-2019 and his job approval was still in the dumps.

[Pres Mike]

Meh, the average American family still has far less spending power now than 2019. It doesn't really matter if inflation is finally beat. Prices have risen much faster than income these last few years. The damage is done.

Is going to the grocery store easier now or Nov 2019? What about buying a home?

[Nyvin]

Even though this is the bigger issue, what will have a bigger impact on the election is gas prices going down...because that's how the average American thinks.

[Progressive Pessimist]

Even though this is the bigger issue, what will have a bigger impact on the election is gas prices going down...because that's how the average American thinks.

True. Timing is everything. That assumes gas prices will go down at the right time. Typically they do in the autumn.

[Kamala's side hoe]

Even though this is the bigger issue, what will have a bigger impact on the election is gas prices going down...because that's how the average American thinks.

Just a personal anecdote, but gas prices have gone down in my area during the last few weeks- and they’re significantly lower than they were this time 2 years ago.