The Critical 'I'

Read. React. Repeat.

Friday, June 25, 2004

We can dispense with the suspense, thanks to SunTrust chief economist Gregory Miller. He's come up with "the June 30th phenomenon", a historical analysis of how leading economic indicators--job growth and inflation--at the end of June in Election years indicate the outcome in November.

How are the numbers looking for this upcoming June 30th? Good enough that Miller is predicting another four years for George W. Bush.
There are fewer jobs since Bush took office in January 2001, but the trend coming into the summer has been good: 250,000 payroll jobs a month have been added.

The inflation half of the equation is a bit dicier.

A year ago, inflation rates were between 1 and 1.5 percent, and although they are still well below historical highs, they have about doubled in the past year.

Still, Miller said, inflation has not risen high enough or broadly enough for most voters to have noticed. Most of what voters have seen of price increases has been isolated to such things as gas and milk.
In addition, extraordinary events like the Iraqi situation and the war on terror shouldn't have a big enough impact to overshadow the economic factors. This underlines the primacy of the pocketbook in election politics--if it doesn't affect the paycheck, it ultimately doesn't matter enough.

It's a fascinating study. I especially appreciate the use of data all the back to 1948.