UCLA Anderson Forecast’s quarterly outlook for the national economy foresees real gross domestic product growth in the 2.0% to 2.5% range throughout 2017 and 2018, where it has been for the past seven years. With the economy approaching full employment, employment growth is expected to slow from what has been a consistent 200,000 jobs per month to about 150,000 per month in 2017 and 125,000 per month the following year. The national unemployment rate is predicted to be in the 4.8% to 5.0% range throughout the forecast period. In California, steady gains in employment are expected through 2018, while the unemployment rate in the state is expected to decrease during the next two years. California’s unemployment rate is expected to be insignificantly different from the U.S. rate at 5.4% by the end of the forecast period.
How Does the Economy Affect the Presidential Election?
This quarter, Forecast Economist William Yu takes a historical look at how “the economy” influences presidential elections. Yu’s research includes state data from 1968 through 2012 and led him to the following conclusions:
- The economic performance factor explains about 10% of variation of votes across states during this period. The non-economic performance factor explains 3.0% of variation.
- The demography factor explains 13% of variation of votes. The religion factor explains 3.0% of variation of votes.
- The state characteristic factor, which we assume remains constant for each state during this period, explains 51% of variation of votes across states.
- The rest (20%) is unexplained, which could be attributed to factors such as candidates’ individual qualities and campaign messages, and strategies compounded with other issues of voter concern in each election cycle.