Yale Economic Model Still Predicts Bush Landslide in November

Yale - Fairmodel Presidential Equation ^ | February 14, 2004 | nwrep

[Nick Danger]

In the past there was a strong correlation between GDP growth and Job Growth.

What makes you think there still isn't? Six months is not a long time for these things.

Here are quarterly GDP growth rates from the Reagan era:

 1982 02  5173.6   1.901%  -1.534%
 1982 03  5159.9  -1.055%  -2.395%
 1982 04  5171.2   0.879%  -1.024%
 1983 01  5204.7   2.617%   1.076%
 1983 02  5311.9   8.497%   2.673%
 1983 03  5393.7   6.304%   4.531%
 1983 04  5484.0   6.867%   6.049%
 1984 01  5590.0   7.959%   7.403%
 1984 02  5656.0   4.807%   6.478%
 1984 03  5698.7   3.054%   5.655%

As you can see, the growth spurt started in the 2nd quarter of 1983, with four months of absolutely booming (and unsustainable) numbers in the 6-8% range.

Here are the unemployment rates for 1983. Where the GDP data was quarterly, the unemployment stats are by month:

 1983 01 10.4
 1983 02 10.4
 1983 03 10.3
 1983 04 10.2
 1983 05 10.1
 1983 06 10.1
 1983 07 9.4
 1983 08 9.5
 1983 09 9.2
 1983 10 8.8
 1983 11 8.5
 1983 12 8.3

Six months after the spurt in growth became apparent in the GDP numbers, the umployment rate had not gone down even one point. It then dropped another whole point in the following 3 months.

I think it's hilarious to watch these so-called economists from the left calling this a 'jobless recovery.' If they are even minimally competent, they know about this lag effect. It's in the numbers from every recession & recovery since dirt, and it's intuitively obvious why it occurs. So here they go on TV to throw a spear at Bush, knowing for certain that what they have to say will be overrun by events within just a few months. But they do it anyway. Why? Because they don't care about their own credibility. They only care about throwing near-term spears at Bush.

[EGPWS]

Two can play at the "jobless recovery" game.

And YOU anticipate the red carpet of victory to be rolled out for YOU?

Thank you God for giving me a personal sense of perspective that includes common sense.

[december12]

The trouble with models like this is that the parameters are selected to fit past data, so a fit is assured. Therefore, an excellent fit doesn't necessarily mean that the model has excellent predictive value. Still, Bush ought to be favored to win.

[AntiGuv]

Thank you , but I am not myself interested in personal anecdotes from either the employed, the unemployed, or the friends of the employed. The employment and income statistics are what they are and they are not even remotely in line with historical patterns of growth.

[AntiGuv]

Did you overlook the fact that the recession has been over for about 28 months?

[EGPWS]

Thank you , but I am not myself interested in personal anecdotes from either the employed, the unemployed, or the friends of the employed. The employment and income statistics are what they are and they are not even remotely in line with historical patterns of growth.

Good enough, AntiGuv, I wish you the best in your quest of obtaining a thirst quenching half empty glass of water.

I'll be thinking of ya', in April, when I file my taxes.

Oh, and no need to say it, however, your welcome.

[varon]

BUMP

[AntiGuv]

I'll be thinking of ya', in April, when I file my taxes.

Is that an insult?? LOL

If it matters, I am fairly confident that GWB will win, I just don't think it'll be with 58%. More like something between 49% and 51%, with 53% at best.

[nwrep]

Last 6 months of 2003 had 6.1% GDP growth but only about 250,000 new jobs.

Some recent articles have pointed to drawbacks in the current BLS method of estimating employment. For one thing, it underestimates the number of self-employed individuals, which has gone up over the last generation.

[Nick Danger]

Did you overlook the fact that the recession has been over for about 28 months?

No. If I went farther back in time in the Reagan era, I would find the same thing. There were two quarters of 6%-plus growth in 4Q80 and 1Q81. Then the numbers got sucky again until the sustained growth of 2Q83 started. Following your methodology, I could say that the Carter Recession ended in late 1980. But the unemployment rate was still in the 10% range 28 months later.

If you look at the Bush-era numbers, it's the same deal. I could, as you have here, declare the start of the recovery to have been 4Q01. But as they did in 1980 and 1981, things went back on slow simmer until 2Q03 -- about 7 months ago.

The pattern is almost identical.

[AntiGuv]

My methodology is that of the National Bureau of Economic Statistics, which tells me that we were in recession from July 1981 to November 1982. So, while I could say that the Carter recession beginning January 1980 ended in July 1980, I would be dissembling if I ignored the second dip. Try again.

[AntiGuv]

Enjoy.

[EGPWS]

If it matters, I am fairly confident that GWB will win, I just don't think it'll be with 58%. More like something between 49% and 51%, with 53% at best.

Maybe so, however I do believe it's time to discard the horseshoes and rid one's self of hand grenades for in the quest for the Presidency, neither are relevant.

[AntiGuv]

Make that National Bureau of Economic Research (not Statistics). Oh, and here's a helpful, though outdated graph:

[Schattie]

You're forgetting that under Reagan in one of those months we had almost one million jobs added to the economy... an unprecedented number. We have to see a number like that soon or perhaps this will be the first time such a model has failed.

[So Cal Rocket]

Correct me if I'm wrong... but doesn't this model err in predicting a GHW Bush victory in 1992? (50.9% Predicted [win] vs. 46.5% actual [loss])

[JohnBDay]

This is awesome! bumb

[JohnBDay]

This is awesome! bump

[narses]

No doubt you prefer ignorance. You should be aware that the statistics offer wildly different views. One government survey shows a massive set of job losses, another government survey shows robust job growth. You may prefer statistics, but ask yourself how many people YOU know who are unemployed, how many are employed, and WHY. Use your senses and your brains rather than "statistics" and your conclusions may have more real world validity.

[narses]

Can you comment on the divergent government reports on unemployment?