Can early economic conditions predict elections?
Economic indicators typically become predictive long before polls do, but the 2020 election is still too far away for this to matter
What to do with 2020 election predictions that are made in August 2019:
The Takeaway: Early general election polling is useless. Trial-heat polls bear no resemblance to outcomes until the election is roughly 10 months away. But while election-watchers may supplement this deficit of data with economic indicators, they, too, are not perfect. It’s best to hold your horses on crafting predictive models at least until primary season rolls around.
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People (by which I mostly mean Twitter) are starting to form opinions based on 2020 general election polling. But as I’ve discussed in this newsletter (and elsewhere), pre-election polls are not at all predictive of election day outcomes until about the dawn of the election year—and even then, they’re still pretty useless. You have to wait until the fall of the election year to really use polls to nail down expectations for the range of possible election outcomes.
Recall that I have in the past shared this graph from my former professor Chris Wlezien and his co-author Robert Eikson’s book, “The 2012 Campaign and the Timeline of Presidential Elections", showing that polls released more than 300 days before a general election have absolutely zero predictive power.
Eager election-watchers may still turn to early economic indicators for a leg up, the most predictive of which, according to Wlezien and Erikson, is voters’ feelings toward the national economy. When voters sour on the economy they punish they president at the voting booth. Should the economy falter, logic would reason, so might the president’s election prospects. Election-watchers pulling for Trump’s demise may be delighted by today’s economic news: the major stock indices plummeted 3% and the US treasury yield curve has inverted, a tell-tale sign of looming recessions.
While Mr Trump’s election prospects would undoubtedly sink during a recession, it’s worth keeping in mind that early economic indicators middling predictors in anticipating outcomes that are 15 months away, though they are much more useful than polls (at least until the end of the cycle). Here’s another figure from Wlezien and Erikson’s book:
However, while it used to be the case that voters cared about the economy, I’m not so sure that’s true any longer. It is reasonable to believe that Trump’s approval rating would sink if the economy got worse, even though the current level is about 20 points lower than we would expect with an economy as good as it is.
The moral of the story: polls this early are useless. Economic data might get us closer to a good prediction, but they’re not too good either. Just find something else to do in the meantime.