Consumer Confidence and Elections: 
Do consumer attitudes shift predictably around the time of an election?  Do these chan...
 
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Consumer Confidence and Elections

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Do consumer attitudes shift predictably around the time of an election? Do these changes differ
depending on whether the election is a presidential or midterm election?

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Consumer Confidence and Elections

  1. 1. Consumer Confidence and Elections:  Do consumer attitudes shift predictably around the time of an election?  Do these changes differ  depending on whether the election is a presidential or midterm election?  Consumer Confidence has been collected on a monthly basis in the last quarter of the year since 1977.  This gives us 16 election years, 8 presidential and 8 midterm, for which we can study Consumer  Confidence between October and November—before and after an election. We also have 17 non‐ election year measurements for comparison.  The Consumer Confidence Index, the change and percent  change in the index, and election information are depicted in the chart that follows.  On average, the consumer confidence index increased by 1.8, a 2.8 percent gain, from October to  November.  This average includes 12 declines from October to November and 21 gains.  The breakdown  among election years shows that gains also outpace declines.  In all election years, the consumer  confidence moved up in November 11 times and moved down only 5 times for an average gain of 2.4 in  the index or 4.0 percent.    Separating election years into presidential and midterm election years, we see that the index improved  in November in 5 of 8 presidential election years and 6 of 8 midterm election years.  Average gains were  somewhat higher in the presidential election years, the index was up 2.6 or 5.2 percent as opposed to  an increase of 2.2 in the index or 2.9 percent in midterm election years.    By comparison, non‐election years saw more even odds on the change in Consumer Confidence from  October to November; the index increased in 10 of 17 years.  The gains in non‐election years were also  smaller.  The index rose by 1.2 on average or 1.5 percent.  Will the upcoming election have an effect on Consumer Confidence?  If history is a guide, the upcoming  election suggests that Consumer Confidence is more likely to rise than fall from October to November,  but the gain may not be as sizeable as it would if this were a presidential election year.  A gain in  Consumer Confidence would be positive news.  Perhaps instead of being glued to the TV watching  election returns, consumers will start shopping.  Confidence is historically indicative of consumer  spending, especially on larger purchases such as durable goods.  September’s reading was 48.5.  While  this is an improvement over the winter of 2008 – 2009, the Consumer Confidence has not yet returned  to a prerecession level, when it was above 90. 
  2. 2.   Year October November October to  November (%) October to  November Type of Year Election  Type President Party House  Results Senate  Results 1977 95.5 98.9 3.6% 3.4                    No Election 1978 108.6 96.5 ‐11.1% (12.1)                Election Year Midterm Carter D D ‐15 D ‐3 1979 92.3 90.2 ‐2.3% (2.1)                   No Election 1980 84.2 87.2 3.6% 3.0                    Election Year Presidential 1981 75.6 66.9 ‐11.5% (8.7)                   No Election 1982 54.3 57.4 5.7% 3.1                    Election Year Midterm Reagan R R ‐26 R +2 1983 92.1 96.7 5.0% 4.6                    No Election 1984 99.1 105.5 6.5% 6.4                    Election Year Presidential 1985 96.1 98.1 2.1% 2.0                    No Election 1986 85.8 89.7 4.5% 3.9                    Election Year Midterm Reagan R R ‐5 R ‐8 1987 115.1 100.8 ‐12.4% (14.3)                No Election 1988 116.9 112.9 ‐3.4% (4.0)                   Election Year Presidential 1989 117 115.1 ‐1.6% (1.9)                   No Election 1990 62.6 61.7 ‐1.4% (0.9)                   Election Year Midterm G. H.W. Bush R R ‐8 R ‐1 1991 60.1 52.7 ‐12.3% (7.4)                   No Election 1992 54.6 65.6 20.1% 11.0                  Election Year Presidential 1993 60.5 71.9 18.8% 11.4                  No Election 1994 89.1 100.4 12.7% 11.3                  Election Year Midterm Clinton D D ‐54 D ‐8 1995 96.3 101.6 5.5% 5.3                    No Election 1996 107.3 109.5 2.1% 2.2                    Election Year Presidential 1997 123.4 128.1 3.8% 4.7                    No Election 1998 119.3 126.4 6.0% 7.1                    Election Year Midterm Clinton D D +5 no change 1999 130.5 137 5.0% 6.5                    No Election 2000 135.8 132.6 ‐2.4% (3.2)                   Election Year Presidential 2001 85.3 84.9 ‐0.5% (0.4)                   No Election 2002 79.6 84.9 6.7% 5.3                    Election Year Midterm G. W. Bush R R +8 R +2 2003 81.7 92.5 13.2% 10.8                  No Election 2004 92.9 92.6 ‐0.3% (0.3)                   Election Year Presidential 2005 85.2 98.3 15.4% 13.1                  No Election 2006 105.1 105.3 0.2% 0.2                    Election Year Midterm G.W. Bush R R ‐30 R ‐6 2007 95.2 87.8 ‐7.8% (7.4)                   No Election 2008 38.8 44.7 15.2% 5.9                    Election Year Presidential 2009 48.7 50.6 3.90% 1.9                    No Election 2010 ?? ?? ?? ?? Election Year Midterm Obama D ?? ?? Conference Board: Consumer Confidence

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