The economic data was just weak enough this week to cause a slight decline in The Times's weekly election-year job tracker. The economists at Moody's Analytics now forecast average monthly job growth of 129,000 in the six months leading up to election, down from a forecast of 131,000 a week ago.
The economists write:
Good news on the economy is scarce; our estimate of second-quarter GDP has been lowered several times, and now is close to 1% annualized. This pace of growth is unlikely to spur faster business hiring, thus the job market will not improve significantly in the third quarter. Not only is spending on a weak trajectory, but it is increasingly difficult to see what would spark stronger growth over the remainder of 2012.
Uncertainty about the economy and U.S. fiscal situation is leading us to lower our forecast for job growth leading up to the election. This was an underlying theme of the Fed 's latest Beige Book, which noted that firms are delaying adding full-time workers. We are also unlikely to get clarity on the U.S. fiscal situation until after the presidential election, keeping the job market recovery in low gear.
The forecast for rate of growth remains in a range that would suggest a close presidential election. As we have noted before:
Historically, nothing - not social issues, campaign advertisements or gaffes - has influenced voters more heavily than the direction of the economy in an election year. In only three races since World War II has the outcome been different from what the economy's direction would have suggested: 1952 (when the popular Dwight D. Eisenhower was running), 1968 (when the Vietnam War hobbled the Democrats) and 1976 (when Watergate hobbled the Republicans).
