Obama Second Term Would Defy Confidence Measure: BGOV Barometer
A second term for Barack Obama would make him the first president in more than 40 years to win with an electorate that has such a sour outlook on the economy.
The BGOV Barometer shows that the Conference Board’s consumer confidence measure has accurately signaled the result of the re-election bids of the last seven presidents, starting with Richard M. Nixon’s 1972 campaign. The incumbent president has won in years when the monthly confidence number averages above 95, bad news for Obama with the indicator averaging 66 so far in 2012.
“People are anxious, and from the standpoint of the public, they have a limited store of options,” Bruce Buchanan, a political scientist at the University of Texas-Austin who studies voter behavior in presidential elections, said in a telephone interview. “All they can do if they’re unhappy with the direction of economic events and growth and prosperity and such is change horses.”
So far, Obama’s Republican challenger, Mitt Romney, hasn’t been able to turn the consumer mood into a clear advantage. Most polls give the president a slight lead or show the race too close to call.
Only George H.W. Bush, a Republican, encountered a lower consumer confidence average in his re-election year. Among presidents during the 45 years since the confidence survey began, the first President Bush, Republican Gerald Ford and Democrat Jimmy Carter each failed to win a second term in office.
President Bill Clinton, who won re-election in 1996, enjoyed a consumer sentiment average of 105 that year. The annual figure is the highest among the seven presidents vying for a second term since 1968.
At least one driver of the negative sentiment probably will linger through the election. The so-called fiscal cliff -- when tax cuts on wages, capital gains, dividends and estates are scheduled to lapse at year-end while automatic spending cuts take effect -- could continue to weigh on confidence.
“A significant dip in sentiment in mid-2011 came amid a period of heightened uncertainty regarding the outlook for fiscal policy, a factor that seems likely to be repeated in the coming months with the approaching debate about the ‘fiscal cliff,’” Peter Newland, a New York-based U.S. economist for Barclays Plc, wrote in a June 26 note to clients.
How consumers register their sentiment via the ballot box also could depend on Obama’s progress in reducing unemployment, which stands at 8.3 percent, compared with 7.8 percent when the president took office in January 2009.
“That’s the one that is potentially the most dangerous because it’s the one that is most directly touching prospects of ordinary people,” Buchanan said of the payrolls numbers.
The unemployment rate was 5.2 percent in the month before Clinton’s re-election, compared with a 6.2 percent average over the last 45 years.
Unemployment reached 9 percent in 1975, the year before Ford lost re-election. It reached a 45-year peak of 10.8 percent in 1982, between Carter’s failed re-election bid and Ronald Reagan’s successful run for a second term.
The Bloomberg Consumer Comfort Index, which measures consumer sentiment based on questions about personal finances, the broader economy and spending, has shown an average minus 39.2 reading so far this year. That compares with minus 44.3 in the year George H.W. Bush lost re-election, minus 10.7 for the year George W. Bush won his second term and minus 10.8 for the year Clinton was re-elected. Annual data in the Bloomberg index date back to 1991.
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