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March 07, 2012

Consumer Confidence and the 2012 Presidential Election

Have you ever heard of the Consumer Confidence Survey? The monthly survey is conducted by an organization called The Consumer Confidence Board and provides a metric of consumer confidence called the "Confidence Index". There's an interesting correlation between the popular vote for the incumbent party in the White House and this metric. Observe:

Consumer Confidence Index and Election Results

*The Democratic party lost the electoral vote, however.

All of these indices were as of October in the years reported. The most recent index is 70.8, for February of 2012.

Now you may notice that the Confidence Index associated with a win is 100 and the highest Confidence Index associated with a loss is 87. If this were October, a Confidence Index of 70.8 would hardly give the incumbent president, Barack Obama, much reason to cheer. But what will happen in October? For a guess about that, remember that gas prices soar in the summer, whereas they're typically at their lowest around February. Higher gas prices mean higher production costs for goods, higher delivery costs, and - most important - less discretionary income for consumers. It's interesting that when oil and fuel prices increase, the products on our shelves cost more, yet we have less money to purchase them. I expect that, this summer, the only businesses which are going to do really well are the online services sites, such as adult webcam sites along the lines of "I'm Live!", will do well at all, given that they neither require fuel for the creators to produce the service, nor fuel for the consumer to get there.

Text version:

Index / Year / Incumbent Party / Win or loss of the popular vote

112 / 1972 / Republican / Won
100 / 1984 / Republican / Won
113 / 1988 / Republican / Won
107 / 1996 / Democrat / Won
143 / 2000 / Democrat / Won *
106 / 2004 / Republican / Won

87 / 1976 / Republican / Lost
65 / 1980 / Democrat / Lost
61 / 1992 / Republican / Lost
52 / 2008 / Republican / Lost

*The Democratic party lost the electoral vote, however.

Posted by Jeff at March 7, 2012 03:12 PM

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