President Donald Trump has a low approval rating. He is engaging in bitter Twitter wars and facing metastasizing investigations.
But if the election were held today, he’d likely ride to a second term in a huge landslide, according to multiple economic models with strong track records of picking presidential winners and losses.
Credit a strong U.S. economy featuring low unemployment, rising wages and low gas prices — along with the historic advantage held by incumbent presidents.
While Trump appears to be in a much stronger position than his approval rating and conventional Beltway wisdom might suggest, he also could wind up in trouble if the economy slows markedly between now and next fall, as many analysts predict it will.
And other legal bombshells could explode the current scenario. Trump’s party managed to lose the House in 2018 despite a strong economy. So the models could wind up wrong this time around.
Despite all these caveats, Trump looks surprisingly good if the old James Carville maxim coined in 1992 — “the economy, stupid” — holds true in 2020.
“The economy is just so damn strong right now and by all historic precedent the incumbent should run away with it,” said Donald Luskin, chief investment officer of TrendMacrolytics, a research firm whose model correctly predicted Trump’s 2016 win when most opinion polls did not. “I just don’t see how the blue wall could resist all that.”
Models maintained by economists and market strategists like Luskin tend to ignore election polls and personal characteristics of candidates. Instead, they begin with historical trends and then build in key economic data including growth rates, wages, unemployment, inflation and gas prices to predict voting behavior and election outcomes.
Yale economist Ray Fair, who pioneered this kind of modeling, also shows Trump winning by a fair margin in 2020 based on the economy and the advantage of incumbency.
“Even if you have a mediocre but not great economy — and that’s more or less consensus for between now and the election — that has a Trump victory and by a not-trivial margin,” winning 54 percent of the popular vote to 46 for the Democrat, he said. Fair’s model also predicted a Trump win in 2016 though it missed on Trump’s share of the popular vote.
Still, Luskin, Fair and other analysts who use economic data and voting history to make predictions also note that a sharp decline in growth and an increase in the unemployment rate by next fall could alter Trump’s fortunes.
“It would have to slow a lot to still be not pretty good,” Luskin said, adding that what really matters is the pace of change. Even if overall numbers remain fairly strong, a sharp move in the wrong direction could alter voting behavior.
Luskin’s current model — which looks at GDP growth, gas prices, inflation, disposable income, tax burden and payrolls — has Trump winning by a blowout margin of 294 electoral votes.
The White House remains confident that the GOP tax cut will support growth of 3 percent both this year and next, keeping job and wage gains strong. That’s much higher than consensus forecasts from the Federal Reserve and major banks that generally see a global slowdown led by Europe and China, coupled with the fading impact of U.S. tax cuts pushing U.S. growth closer to 2 percent this year with job gains slowing.
