Tag: economic data
Moody’s Analytics Election Model Predicts Big Clinton Win

Moody’s Analytics Election Model Predicts Big Clinton Win

(Reuters) – Low gas prices and President Barack Obama’s high approval ratings are key factors that favor Democrat Hillary Clinton winning the White House in next week’s election, according to a model from Moody’s Analytics that has accurately predicted the last nine U.S. presidential contests.

Clinton is forecast to pick up 332 Electoral College votes against 206 for Republican Donald Trump, Moody’s Analytics predicted on Tuesday in the final update of its model before Election Day on Nov. 8. That would match Obama’s margin of victory over Republican challenger Mitt Romney in 2012.

The Reuters-Ipsos States of the Nation project also predicts a Clinton win, with a 95 percent probability of her winning at least 278 electoral votes. A candidate needs to win at least 270 electoral votes to be elected president.

The Moody’s Analytics model is based on a combination of state-level economic conditions and political history, and has correctly called the outcome of each presidential election since Republican Ronald Reagan unseated Democrat Jimmy Carter in 1980.

Rather than focus on the individual candidates in a race, the model instead centers on whether current economic and political conditions favor the incumbent party in the White House. This year those factors point to Clinton becoming the 45th U.S. president.

The economic factors Moody’s measures include the two-year percentage changes in real personal income per household, as well as house and gasoline prices.

Among the political factors weighed, Moody’s said the most important is the share of the vote in any one state that went to the incumbent party in the previous election. It also takes into account voter fatigue and the incumbent president’s approval ratings.

This year, with Obama enjoying some of his highest job approval ratings since his first year in office in 2009 and gasoline prices holding steady at well-below-average levels, the model suggests the Democrats will win their third straight presidential election, Moody’s said. That would mark the first time since the 1988 election of Republican George H.W. Bush that one party has won three consecutive presidential contests.

Moody’s warns, however, that its model does not take into account any individual characteristics of specific candidates.

“Given the unusual nature of the 2016 election cycle to date, it is very possible that voters will react to changing economic and political conditions differently than they have in past election cycles, placing some risk in the model outcome, particularly state-by-state projections,” Moody’s analytics economist Dan White wrote in the report.

(Reporting By Dan Burns; Editing by Jonathan Oatis)

IMAGE: U.S. Democratic presidential nominee Hillary Clinton attends a campaign rally accompanied by vice presidential nominee Senator Tim Kaine (not pictured) in Pittsburgh, U.S., October 22, 2016. REUTERS/Carlos Barria/File Photoeconomic 

Weak Growth And Manufacturing Numbers Point To A Sluggish Economy

As Washington begins its slow walk away from a partisan debt-ceiling fight, a trove of recent economic data points to a painfully sluggish economy, and signals that the last-minute nature of the deal allowed for a softening of already-weak confidence in growth.

First, the U.S. Bureau of Economic Analysis released revisions to its past assessments of GDP. Their new figures indicate that the U.S. economy grew by just 1.3% in the second quarter and by a measly 0.4% in the first quarter of this year — a significant downward trend. To make matters worse, the report estimated that the recession of 2007-09 was much deeper than previously projected, with the economy having shrunk 3.5% (as opposed to 2.6%) in 2009 alone.

The manufacturing data released today were no reason for celebration either. The Institute for Supply Management (ISM) July index took the wind out of the sales of an early morning Wall Street rally, investors having rejoiced at the prospect of a deal in Washington to avert U.S. default. From the report:

ISM’s New Orders Index registered 49.2 percent in July, which is a decrease of 2.4 percentage points when compared to the 51.6 percent reported in June. This is the first month of contraction in the New Orders Index since June of 2009, when it registered 48.9 percent. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

ISM’s Employment Index registered 53.5 percent in July, which is 6.4 percentage points lower than the 59.9 percent reported in June. While this month represents the 22nd consecutive month of growth in manufacturing employment, the July reading is also the lowest reading since December 2009, when the index registered 53.2 percent. An Employment Index above 50.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Compounding the slow growth and the lackluster manufacturing numbers is lingering uncertainty about the United States’ credit rating. Today’s market downturn was fueled in part by a flight from dollar holdings to so-called safe-haven currencies like the Swiss franc. In fact, the U.S. dollar reached record lows compared to the franc on Monday, and there’s no indication the deal on a future “Super Congress” to tackle runaway spending and a massively flawed tax system will affect market perceptions of U.S. solvency.