Yes, the recovery has been horrible. But it seems that the U.S. economy was just good enough to get President Obama a second term. As AEI’s Kevin Hassett notes over at National Review:
Models that predict elections using only economic variables have an almost perfect track record. When the economy is improving, incumbents tend to win. When it is worsening, they tend to lose. …
As weak as the recovery has been, the econometrics suggested that it was strong enough to reelect an incumbent. The most sophisticated extension of Fair’s model has been tracked for almost a decade by Moody’s Analytics. The Moody’s model uses state-level economic data to predict the outcome of the presidential election in each state, and then aggregates the information to make a prediction for the Electoral College. In February, Moody’s published the nearby electoral map. Comparing its analysis with the actual outcome, one sees that the model called every state correctly except Florida.
Hassett mentions the forecasting model of Yale University’s Ray Fair. Fair’s model actually predicted Romney would take 51% of the two-party vote versus Obama’s 49% — though he added this “too-close-to-call”caveat:
The standard error of the vote-share equation is at least 2.5 percentage points (see the November 2010 update above), and so 50.0 percent is well within a one standard deviation error band centered at 49.0. The present results thus have a very limited amount to say about the likely winner of the presidential election. This is especially true in the current election because it could be that Obama loses the popular vote but wins in the electoral college.
Two data points in favor of Obama: GDP growth was 2.7% in the third quarter, the third-best read since the recovery officially began in the summer of 2009. Also, payroll growth upshifted to 173,000 in the July through October period.