President Obama's first four years in office have proven a profitable time for stock pickers on Wall Street and expensive one for everyday commuters, but how the bull market in stocks and the high prices at the pump will balance out at the polls in November is an open question.
While the campaigns of Mr. Obama and challenger Mitt Romney fiercely dispute the president's achievements on jobs, health care, regulation and foreign policy, there are a few numbers that are a bit harder to fudge. The S&P 500 and Nasdaq stock indexes have both fared better in Mr. Obama's first term on a percentage basis than in the first terms of any of his five Democratic and Republican predecessors. Then again, the average price of a gallon of gas nationwide more than doubled since Mr. Obama was inaugurated in January 2009, the biggest jump since the one-term administration of President Jimmy Carter. The price of gold — often seen as a hedge against hard times and economic uncertainty — has gone from $835.25 an ounce when Mr. Obama took office to $1,669.80 this week.
The Dow Jones index of the top industrial stocks, for instance, fell by an Inauguration Day record 332 points to 7,949.09 when Mr. Obama took office, has been rising ever since, closing Friday at 13,157.97, a 58.9 percent increase. But Mr. Obama also took office shortly after a rally had begun in the last year of President George W. Bush's administration, and the Dow still has not reached the all-time record closing high of 14,164.53 on Oct. 9, 2007.
The broader Standard & Poor's index is up 66.1 percent for Mr. Obama's first term and the Nasdaq stock market has more than doubled, both increases more than was seen in the first terms of Presidents Carter, Reagan, George H.W. Bush, Bill Clinton and George W. Bush, even as Mr. Obama has had sometimes difficult relations with Wall Street on issues ranging from financial regulation and taxes to the virtues of equity capitalism.
Whether the stock market's good times will persist through Election Day is also not certain. Nomura Group analyst Bob Janjual predicts the S&P will fall by 20 percent to 25 percent between now and November. If that happens, it could spell trouble for Mr. Obama.
With many political science forecasting models heavily focused on economic fundamentals and with the macroeconomic numbers such as unemployment and federal deficits not looking strong for the president, the big question for both Democrats and Republicans is how much the pocketbook issues will matter for voters.
A new study from the Social Science Research Network, a website that publishes scholarly research in fields such as economics and finance, argues that the stock market is the most important factor in determining whether a sitting president will be re-elected. In fact, its had a 33 percent influence on voters' choices, compared with only a 1 percent influence for the unemployment rate.
"The best single predictor of presidential re-election results that we found was the percentage change in the stock market during the three years that preceded Election Day," the study reported.
On one hand, Republican President Herbert Hoover, saw the markets fall 77 percent in his one term before his landslide loss to Franklin D. Roosevelt. But the younger Mr. Bush, despite having the worst record of the Dow, the S&P 500 and the Nasdaq of the past six presidents, managed to defeat Democratic challenger John F. Kerry in 2004.
But the raw numbers don't tell the full story. Mark Zandi, chief economist at Moody's Analytics, suggested that's because voters are more focused on the unemployment rate and personal income levels, which have a greater impact on how they feel about the economy than stocks. And those numbers haven't been so friendly to the president.
"The stock market matters, but the most important factor is unemployment and personal income," he said. "That's how people perceive and feel about the economy."
Furthermore, the price of gasoline has contributed to voters negative feelings about the economy. Pump prices have more than doubled under Mr. Obama, from $1.84 when he first took office to $3.76 currently — after at one point earlier this year flirting with $4 a gallon. That compares with a 48 percent increase under Mr. Carter and a 22 percent increase under the younger Mr. Bush.
On the other hand, gas prices were stable during the first Bush and Clinton administrations, and even declined 25 percent under President Ronald Reagan.
"Gasoline prices are a bit of a negative, because they've been higher," Mr. Zandi said.
These concerns are seen in the price of gold, which has reached an all-time high under the Obama administration. Gold is considered a stable investment, so in times of economic uncertainty investor interest tends to switch to gold, pushing up the price. At more than $1,600, gold is up nearly 96 percent from when he first took office. This compares with Mr. Carter, who saw the price of gold jump about 375 percent during his first term in office to more than $630 at the time — the biggest increase in percentage terms of any recent president.
"Gold reflects fear, global fear, and of course, there's lots to be nervous about," Mr. Zandi said.
And where a president starts on the economic pendulum can affect the data. Reagan, coming into power after the stagflation of the Carter years, endured a sharp downturn early in his first term and cruised to re-election over Democrat Walter F. Mondale as voters sensed the economic recovery taking hold by the end of his first term.
During Reagan's first term, the stock markets increased about 25 percent, the dollar was stable, and gas prices declined.
"I have to give Reagan a lot of credit," said Mark Zupan, dean of economics and public policy at the University of Rochester's Simon School of Business. "A lot of the boom in the 1980s had to do with his policies and not trying to stimulate ourselves into a recovery. It was much more active than in recent years when we tried to stimulate our way out" or a downturn.
Given the economy he inherited, economists say Mr. Obama can at least make the case in key parts of the country the recovery is starting to gain traction. Mr. Zandi pointed out that in the most-important swing states — Ohio, Florida, Virginia and New Hampshire — the economies are doing better than elsewhere in the country, which could help Mr. Obama in November.
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