A Soft Landing for the Economy—and Biden? (James Pethokoukis, 12/13/23, AEIdeas)
Analysts at Goldman Sachs find “the strongest statistical relationship with the election result is often with [economic] variables measured in Q2 of the election year.” What’s more, they explain, “Inflation appears to be less predictive of election results than growth and labor market variables.”
Given that inflation, rather than jobs and growth, has been America’s biggest economic problem of late, that’s good news for Biden. This, too, perhaps: First-term incumbents traditionally win reelection, unless there’s a recession.
More good news for Biden: Goldman Sachs economists forecast just a 15 percent change of a recession next year, with the JPMorgan team also upbeat:
Overall the labor market continues to look healthy, albeit with some recent softening in the trends for net hiring and wage growth. While there may be some bending in the economy, we don’t see much evidence of a break into a recession and we continue to believe that the Fed will be successful in engineering a soft landing for the economy.