Trump faces race against clock on economy

The worst economic crisis since the Great Depression is depriving President Trump of what was once his strongest argument for a second term.

There are still 10 weeks before the election, and any signs of a strong recovery could bolster Trump’s case that he’s the best steward on the economy. But missteps in containing the coronavirus have dampened the chances of that happening.

The president also faces a much earlier deadline in his race against time since many voters make up their minds on economic issues several months before Election Day. That means even a blockbuster jobs report or GDP number shortly before Nov. 3 would likely do little to sway the electorate.

Election forecasters have long held that economic performance is a key determinant of reelection prospects for Oval Office occupants. For example, no president in the post-World War II era has ever been granted a second term with the unemployment rate in double digits.

The numbers are not in Trump’s favor.

In the past six months, the unemployment rate shot up from a 50-year low of 3.5 percent to 14.7 percent before slowly receding to 10.2 percent. More than 28 million Americans are on the unemployment rolls.

After a decade of moderate growth following the Great Recession, the economy contracted at a whopping 32.9 percent annual pace in the second quarter of 2020, the biggest three-month decline on record for gross domestic product (GDP).

Yale University’s Ray Fair, who created an economic prediction model for the 1980 election, predicts Trump will lose in November unless there’s a significant economic turnaround. Anything short of 23 percent annualized growth in the third quarter would mean no second term, according to Fair’s calculations.

But that could yet happen.

The Conference Board is projecting a 26 percent rate, while forecasters like S&P Global Ratings put the bounce back more in the 18 to 22 percent range.

But G. Elliott Morris, co-creator of The Economist’s election modeling, said even a swift rebound may be too late to save Trump.

The Economist’s modeling has found that economic trends in the summer preceding an election are better predictors of a president’s reelection chances than how things look in the spring or the fall of an election year.

Before the downturn, The Economist’s model put Trump’s chances of reelection at 44 percent. Today, it’s down to just 13 percent.

While the economy is expected to play a major role when voters cast their ballots this year, it’s also competing with related but separate issues, like the pandemic and Trump himself.

“The economy is one of our fundamental indicators, but in a year with a pandemic, where Trump himself plays such a big part in people’s thinking, it’s not clear how much it matters on its own,” Morris said. “People are thinking about health care, job security, the coronavirus.”

Polling from Pew shows the economy as the top issue, but Gallup polls find that it has slipped compared with previous decades as being the No. 1 concern among voters.

“The combined 3 percent of Americans naming the economy, jobs or inflation as the nation’s top problem in January was a record low for a presidential reelection year,” Gallup analyst Lydia Saad said of data from just before the pandemic took hold.

“While the figure has increased to 13 percent in June, this remains on the low side of the range from 7 percent to 79 percent seen in all other reelection years since 1964,” she added.

Trump is still eager to make the economy a campaign issue by reminding voters about how things were before the pandemic.

“Don’t forget, until the China virus came in, we had the greatest economy in the history of the world. And now we’re doing it again. I’m going to have to do it a second time,” he said Tuesday.

Voters still trust Trump more than Biden on handling the economy, but that trust has slipped 16 points in Gallup’s polling during the pandemic.

Democrats, like many economists, have linked the downturn to Trump’s handling of the COVID-19 pandemic that caused the recession.

“Our economy is in shambles because of a virus that this president downplayed for too long. It has left millions of people jobless,” former first lady Michelle Obama said in her Democratic convention speech last week.

Those millions of unemployed Americans are now going without the additional $600 in weekly federal aid that was provided from April through July. The unemployment insurance lapsed after the Trump administration and Democrats failed to strike a deal on a broad coronavirus relief package.

Democrats have blamed Republicans for the stalled negotiations, and Trump has sought to fill the void with a series of executive orders that, among other things, would resume payments of the additional unemployment funds but not for several more weeks and at a reduced amount.

The Biden campaign has put the blame for the economic crisis squarely on Trump, contrasting the current state of affairs with the economy he inherited from the Obama administration.

“The lived reality of everyday families is the truth about Donald Trump’s reckless mismanagement of our nation and economy. His failed leadership has cost millions of jobs, tens of thousands of lives, and driven the strong economy he inherited from the Obama-Biden Administration into one of the deepest recessions in our history,” said Biden campaign spokesperson Rosemary Boeglin.

The Trump campaign is seeking to remind voters about the strength of an economy that defined the first three years of Trump’s presidency while warning that Democratic presidential nominee Joe Biden would kneecap the recovery from the coronavirus recession.

“President Trump faces every challenge head on, and the stark contrast between the success of his agenda and Biden’s socialist manifesto proves that the president is the right man to rebuild our economy again,” said Trump campaign deputy national press secretary Ken Farnaso.