By any measure, it seems likely that the economy will play a huge role in the 2012 presidential campaign. Forecasters have been trying to predict for months how the unemployment rate will affect Obama's reelection chances. The latest contribution to this dialogue? A Wall Street Journal survey of 56 economists, published today. They say the economy's going to keep improving through 2011, and 71 percent of them say Obama's likely to get a second term a a result.
Some findings from the survey:
- Even though the first quarter was shaky, respondents expect the economy to keep growing, eventually hitting 3.6 percent growth by the end of 2011. They expect the economy to add about 200,000 jobs a month over the course of the next year.
- Unemployment will keep dropping, they say. Right now it's at 8.8 percent, the lowest level since 2009; by December they expect it to get down to 8.3 percent.
- Eventually the Fed is going to have to raise interest rates. There's some disagreement about when this will happen--a third of the economists say the rate hikes will come by the end of 2011, while 44 percent say it won't be until the first quarter of 2012--but the consensus seems to be that we're overdue.
- Obama's not going to raise taxes before the election--economists agree on that by a six-to-one margin. And 71 percent say he'll ride the improving economy to a second term. "The economic winds will be at his back," says Dana Johnson, chief economist at Comerica Bank.
It's worth keeping in mind that back in November, economists predicted the unemployment rate would only be down to 9 percent by the end of 2011. And as recently as four weeks ago, economists were guessing we'd have 8.8 percent unemployment in June--and that's the level we're at today.
All of which is to say that these predictions are an inexact science, and that's before you even politicize them. You could do worse than to keep in mind what Jay Cost wrote at The Weekly Standard in November: Looking at "unemployment in November of election years and the incumbent president party's margin of victory/defeat ... there is no statistically significant relationship there whatsoever... The economy is a very important factor in presidential elections (duh!), but voters form holistic judgments about it that are not reducible to a line on a chart."