Friday's employment report confirms that the economic expansion is accelerating. The creation of 288,000 payroll jobs in April was almost double the consensus forecast of 150,000. Coming on top of the 337,000 new jobs created in March (revised up from 308,000), the economy has now created 625,000 jobs in just two months. This is a very impressive performance after months of disappointments.
The immediate effect of this good news has to be to improve George W. Bush's electoral chances. Despite the problems in Iraq, history shows that foreign policy seldom influences elections. Pocketbook issues always predominate. And when times are good economically, voters tend to overlook just about everything else and consistently vote to retain the incumbent candidate or party so as to prolong them.
For months, economists have been predicting that solid growth in the gross domestic product forecast a comfortable victory for Bush on Election Day. The economy has now averaged 5 percent real growth over the past year, and experience shows that this is well more than enough to ensure victory for the incumbent party in presidential elections.
With the April 29 announcement that the economy grew 4.2 percent in the first quarter, Yale University economist Ray Fair raised his prediction of President Bush's share of the two-party vote in November from 58.7 percent to 60.4 percent. Either figure would constitute a blowout victory.
Other economists are not quite so optimistic, but nevertheless show Bush with a large and growing lead. In an April report, Global Insight, the giant economic forecasting company, has him winning 55.8 percent of the two-party vote this year.
Economist Robert Dye of Economy.com looked at economic growth in individual states in an April 21 report and did an electoral analysis on a state-by-state basis. Overall, he sees Bush with 54 percent of the vote and carrying every state except California, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Jersey, New York and Rhode Island. This translates into an Electoral College victory for Bush of 373 votes to 165 for John Kerry.
Of course, all of these forecasters hedged their bets by noting the slow growth in employment up until recently, which could offset the benefit Bush gets from good GDP growth. However, with the latest employment report, which brought the number of unemployed down by 188,000 and the unemployment rate down from 5.7 percent to 5.6 percent, it is becoming increasingly unlikely that this will be a factor.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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