As America enters a presidential election year, will voters be seeing the economy as good and getting better? A “yes” answer could help Democrats do something that hasn’t been done by either party since 1988: win the White House again right after a two-term incumbent leaves office. A “no” could boost Republican chances in what could be a close-fought election.
An improving economy is likely to help the nominee of the party that currently holds the White House. Voters tend to give some credit to the sitting president for how their pocketbooks are doing.
But as recently as 2000 – with an unemployment rate considerably lower than today's – Democrat Al Gore failed to secure the White House after an eight-year stint as the No. 2 to President Clinton.
Today, by many of the traditional gauges, the US economy is doing pretty well. Jobs keep growing – including another 292,000 in December, according to government numbers released Friday. The unemployment rate has been generally falling, and the overall economy keeps expanding, even if the manufacturing sector has cooled a bit because of a downshift in global demand.
Turbulence in the stock market in recent days is being attributed to ripples from China, not from any fundamental problems in the United States.
And some voters are ready to credit President Obama and Democrats with pushing the economy forward in difficult times.
In Virginia, which could be among the election's contested swing states, Carol Farmer is just entering the job market after health-care studies at a community college – and she's glad to see a market that's strengthening.
"I think we're slowly getting back to where we need to be," says Ms. Farmer, of Triangle, Va. "Barack Obama has opened up a lot of doors," helping to create jobs and to make health care accessible to more people, she adds.
Yet, when other factors weighing on voters are added to the mix – from noneconomic issues to the personal qualities of a candidate – many voters aren't ready to commit to any candidate or party just yet. Farmer, for instance, says she hasn't yet engaged much in the election campaign – but she's listening to Republicans like Donald Trump and Ben Carson, as well as to Hillary Clinton on the Democratic side.
Still, economic issues are often central in elections. "If the economy continues to grow ... it certainly helps Hillary Clinton," says pollster Stefan Hankin of Lincoln Park Strategies in Washington.
In focus groups, according to Mr. Hankin, many people say they feel pretty comfortable financially or that things in the economy are getting better. Yet sentiment remains mixed, partly due to negative portrayals of conditions by politicians and the media.
And even with unemployment down to 5 percent of the labor force, millions of Americans are still experiencing the aftereffects of a nationwide housing bust and recession, years of stagnation in average wages, and deep uncertainty about the future.
Those issues could become a challenge to Mrs. Clinton or any Democratic nominee. In the current climate of public opinion, even if the economy stays on an upward track this year, it's unclear how much of a bounce that Democrat will get. Clinton appears well positioned at this point to be that nominee, yet the strength with which Sen. Bernie Sanders has challenged her on her left has been surprising – and is itself a reminder of the deep economic concerns that many Americans have.
Consider that a monthly index of consumer confidence, tracked by the Conference Board in New York, remains below its pre-recession levels, even after 6-1/2 years of economic recovery. The index has been rising, but is nowhere near the heights seen at the turn of the millennium, when Mr. Gore made his presidential bid.
Senator Sanders of Vermont has been polling higher among Democratic primary voters than many pundits had expected – and in part he's doing that by tapping into the same economic anxieties that have helped to propel outsider insurgencies like Mr. Trump's on the right. Sanders rails against Wall Street, wants to make higher education free, and calls for major new policies to combat economic inequality.
A tough time for young Americans
For millions of younger Americans, college debts are a huge financial burden – slowing their ability to do things like buy a home or start saving for retirement. Other challenges, for American families of all generations, range from rising health-care bills and high housing costs (whether owning or renting) to an erosion of wealth and savings during the Great Recession.
"My two sons are confronting an economy that in some ways is much tougher" than it used to be, says Robert Hagen, who had a career with the State Department before retiring in Virginia. He says the state of the economy, and the economic policies of the candidates, will be an important issue for him, and he expects to support Sanders in the primary and the Democratic nominee in the general election.
Many Americans worry that their children or grandchildren will have a lower standard of living than their own.
Still, for all the deep concerns, the progress since the massive wave of job losses has been real.
The gain of 292,000 jobs in December continues a rising tide that has cut the unemployment rate in half since it peaked at 10 percent late in 2010.
Similarly, the number of Americans who are "long-term unemployed" (jobless for more than half a year) has plunged, and the number of people working part time who would rather find full-time work is declining. Inflation-adjusted wages have risen modestly, and some economists predict a pickup in wage growth in the coming year.
Perceptions are getting better, too. Americans' views about their own living standards have been improving steadily, in Gallup polls, since the firm began tracking the issue in 2008.
"Things have picked up," says Kingsley Antwi, a construction worker from Woodbridge, Va., on the outer fringes of the Washington metro area. He recalls having a tough time finding work in 2010, but has seen things improve gradually since then.
Mr. Antwi says the economy will be an important issue when he votes – and he's an independent who's still evaluating the candidates.
Many voters in every state are firmly rooted in one political camp or the other. So pollster Hankin says it's only a small number of voters who are in play over the state of the economy. But as the election campaign unfolds, independents who are driven partly by perceptions of the economy could be a factor in some swing states.