What Does History Say - Consumer Confidence and "Re-Election" Bids

Tequilla · November 5

One of the more important economic indicators to me has always been tied to Consumer Confidence. There's always a number of different sources that you can leverage (they tend to all look similar) and while The Confidence Board is typically the gold standard, accessing historical data isn't easy over a lengthy back period without subscriptions. Instead, I'm leveraging the University of Michigan Consumer Sentiment (can be found by accessing the St Louis Fed website)

What I wanted to take a look at is how re-election campaigns fared with the September data in the year of their election and compare that back to where we are today. And for anybody not familiar with these types of indices, they are all benchmarked with 100 being normal/average sentiment (above 100 = bullish, below 100 = bearish).

2024 Election

September '24 = 70.1
Election results: TBD
Turnout: Early voting appears to be higher for Republicans as the main-in/absentee ballot appears to be taken advantage of in more rural locations; Democrat early voting appears to be down materially versus 2020

2020 Election

September '20 = 80.4
Election Results: Biden won 306-232 over Trump (incumbent)
Turnout: 66.6% of voter base (up 6.6% vs prior election)
Analysis: COVID played a major role in this election as did the mail-in/absentee ballot (this likely changes the normal going forward); consumer confidence actually higher than some other comparable re-election bids

2012 Election

September '12 = 78.3
Election Results: Obama (incumbent) won 332-206 vs Romney
Turnout: 58.6% of voter base (down 3% vs prior election)
Analysis: Romney had an opportunity to beat a somewhat vulnerable Obama but he was a continued trend in the Republicans of not properly listening to the changes in the country from the back-end of the Dubya era

2004 Election

September '04 = 94.2
Election Results: Dubya (incumbent) won 286-251 vs Kerry
Turnout: 60.1% of voter base (up 5.9% vs prior election)
Analysis: Dubya's 1st term got a boost from 9/11 and how he was viewed to handle that in the immediate aftermath but cracks began to show with Iraq turning into a "forever war" and offsetting pretty decent confidence numbers for an incumbent seeking re-election; those cracks accelerated in his 2nd term and led to a dramatic shift away from this version of the Republican Party in the '08 and '12 elections

1996 Election

September '96 = 94.7
Election Results: Clinton (incumbent) won 379-159 vs Dole
Turnout: 51.7% of voter base (down 6.4% vs prior election)
Analysis: Economy was generally viewed positively with the tech boom well underway and was more than enough for Bubba to win re-election with Dole being a blah candidate (see voter turnout)

1992 Election

September '92 = 75.6
Election Results: Clinton won 370-168 vs Bush Sr (incumbent)
Turnout: 58.1% of voter base (up 5.3% vs prior election)
Analysis: Bush ran in 1988 promising no new taxes and then put in added taxes and that absolutely doomed him from the get go; add in a gloomy economic outlook and you get a blowout

1984 Election

September '84 = 100.9
Election Results: Reagan (incumbent) won 525-13 vs Mondale
Turnout: 55.2% of voter base (up 1% vs prior election)
Analysis: As big of a landslide as you can get in an election with Reagan not only turning around the insane inflation from the Carter years but also making significant inroads with respect to ending the Cold War

1980 Election

September '80 = 73.7
Election Results: Reagan won 489-49 vs Carter (incumbent)
Turnout: 54.2% of voter base (down 0.6% vs prior election)
Analysis: Carter's economic situation with double digit interest rates, high inflation, etc. was a disaster and then you also had the hostage situation in Iran in the 1979/1980 time frame plus gas rationing … just a lot of a bad

So what does history tell us?

Confidence levels today are most similar to the re-election bids in 1980 and 1992. In both instances, the incumbents lost and lost big. I'm not sure that you can get that big of a margin today for a number of different reasons, but history would suggest that the incumbent (in this case Harris given her ties into the existing administration) faces a significant uphill climb to win and that's being supported by a lot of the fundamentals that have emerged throughout this campaign cycle.

Even if I was to expand this to sitting VPs running for President in Bush Sr in 1988 and Gore in 2000, both of those situations were substantially better than the conditions Harris is facing. When you look back at Gore in particular, him losing in 2000 actually highlights 1) how blah of a candidate he was as he had zero charisma (parallels to today) and 2) the tendency of the American people to desire change and not have one side or the other in power for too long.

There's a lot of fundamentals that are changing so it will be difficult to really align all until the results come in, but history would suggest that Trump has a reasonable chance of getting 300+ electoral votes in this cycle.