The presidential race is very close. But right now most analysts give President Obama a better than even shot at pulling it out. And if he does win a second term, Obama will have one major development to thank that’s flown largely under the campaign radar: People are feeling better about the economy.
For the first time in five years, the number of Americans who say they feel better off financially than a year ago exceeds the number who say they feel worse off, by 38% to 34%, according to Gallup. That’s a major reversal from just five months again, when “worse” beat “better” by 42% to 37%.
At the same time, President Obama’s approval rating—a key metric for gauging his re-election prospects—has spiked. Gallup—whose head-to-head polls of the race haven't been favorable to Obama—put it at 53% Wednesday (it ticked down to 51% Thursday), way up from 43% as recently as just before the Democratic convention in September.
There’s a reason for those brighter assessments. Everyone agrees that economic growth is still too slow, and unemployment unacceptably high. But in recent weeks, the signs of economic improvement have begun to pile up.
The latest came Friday morning, when the government reported that U.S. GDP grew by 2% in the third quarter, better than expected, thanks in part to increased consumer spending.
That news jibed with other recent positive indicators. Jared Bernstein, who served as Vice President Joe Biden’s top economist, laid out the details in a recent post on the Maddowblog.
The crucial housing sector, Bernstein wrote, “finally seems to be on the mend,” with home prices, re-financing, and new home construction all on the rise.
The job market itself is improving too, Bernstein added. An unemployment rate of 7.8 percent is still far too high, but three years ago it was at 10%. By the same token, we created around 150,000 jobs per month in the third quarter. That’s not enough, but it's twice as many as were created in the second quarter. And there’s evidence that voters are more affected by the trend than by the raw numbers themselves.
Few states have seen faster improvement than politically-crucial Ohio. As Bernstein noted, less than three years ago, the state’s jobless rate was 10.6%—higher than the already-high national rate. Today—thanks in part to Obama’s bailout of the auto industry, which is responsible for around 1 in 8 jobs in Ohio—it’s at 7%. In other words: If you’re looking for reasons why Obama seems to be outperforming his national poll numbers in Ohio, look no further.
Of course, none of this guarantees Obama a victory. The fact remains that no president has been re-elected with unemployment as high as it is since records began. But if Obama does eke out a win on November 6, the brightening economic picture may turn out to have been the key.