The economy will be better on Election Day 2012, according to he Congressional Budget Office. How much better?
- Unemployment, currently at 9.4 percent, will have fallen to a fourth-quarter 2012 average of 8.2 percent.
- Real GDP will have increased 6 percent over its fourth quarter 2010 level
- Consumer price index will have increased 2.6 percent over its fourth quarter 2010 level
- Interest rates (on three-month Treasury bills) will have increased from a 2010 average of .1 percent to a 2012 average of 1.1 percent
All that's according to the massive set of economic forecasts released by the CBO earlier this week. CBO has more stats, but jobs, economic growth, expensiveness of goods, and interest rates jump out as broad-stroke predictors of national mood.
The question, then, is whether this improvement is enough to help President Obama win re-election. The directionality should be encouraging to his campaign, but, then again, there's nowhere to go but up. The economy will have grown, but unemployment will remain relatively high. Goods will be more expensive, and interest rates will be higher.
During the past three presidential elections, unemployment has sat in the 4 to 5 percent range (graph here). For historical comparison, in 2008 The Washington Times compiled info on unemployment during past presidential elections. In the past 50 years, the unemployment rate has risen over 7 percent on a presidential Election Day only four times. In three of those instances, a challenger defeated the incumbent president.
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