State-by-State Polls Compared to Economic Indicators

Ed: WSJ reports cross-sectional analysis correlating election polls with jobless rates, income growth, and housing prices. This again illustrates the temporal lag between current election preferences and Q2 pain from two of the economic stats - data inefficiencies that lead to wrong conclusions.

Even though income growth lags - cost of gasoline, food, and services will be declining soon. Real purchasing power improves.

View	Watch the Grocery Prices - Economic Recovery in Place?

Housing reflects real property. International bailouts and once consumer confidence recovers- these factors lead to improved value for real property like housing, gold, and capital assets. 

Chicken little pundits report past events. Savvy investors look to the future.

Unfortunately, it's too late for McCain.

State-by-State Polls Compared to Economic Indicators

from WSJ.com: Real Time Economics

Tip O’Neill once declared that “all politics is local.” The economy has become the central issue in the 2008 presidential campaign, but not all states are feeling the downturn equally. The following chart illustrates the economic differences among the states and how it might be affecting voters’ preferences.

The latest NBC/Wall Street Journal poll shows voters’ top concern in the coming election is the economy, and 49% of respondents said Sen. Barack Obama would do a better job fixing the economy, compared to 28% who said Sen. John McCain would do better.

The chart, which uses polling data from political Web site Real Clear Politics, tracks three key indicators of voter sentiment about the economy. One is the unemployment rate in the individual states for September, the most recent month for which data are available. Job losses on a national scale have been escalating this year, with the unemployment rate for the nation reaching 6.1%. However, on a state level the rate varies from a low of 3.2% in South Dakota to a high of 8.8% in Rhode Island.

Personal income can also affect voter psychology. The numbers in the chart represent the income growth from the second quarter of 2007 to the second quarter of 2008, the most recent period for which data are available. During that the consumer price index across the nation was running at about 5%. To keep pace with inflation, income has to rise at the same rate.

The decline in home prices also has been a top issue on voters’ minds. The data in the chart are from the Office of Federal Housing Enterprise Oversight house price index for the second quarter, the most recent period for which data are available. The Ofheo index (renamed the Federal Housing Finance Agency house price index) only tracks mortgages backed by Fannie Mae andFreddie Mac. Some economists prefer the S&P/Case-Shiller home price index, which shows a steeper decline in prices from 2007 to 2008, but that measure doesn’t break down its data by state. The most recent data from Case-Shiller can be found here.

Sen. Obama enjoys a lead in all but two of the states that have seen a decline in house prices according to Ofheo index, including four states that went to President Bush in the 2004 election. The two states in which Sen. McCain leads in polling? His home state of Arizona and Alaska, the home state of his running mate, Gov. Sarah Palin. –Phil Izzo

Election and Economy

State	2008 Polls	2004 Result	Home-Price Change	Unemployment Rate	Change in personal income
Alabama	McCain +23.3	Bush +25.7	3.13	5.3	6.10
Alaska	McCain +15.3	Bush +25.6	-0.18	6.8	5.08
Arizona	McCain +04.4	Bush +10.5	-9.18	5.9	4.62
Arkansas	McCain +12.0	Bush +09.7	1.04	4.9	6.34
California	Obama +24.0	Kerry +09.9	-15.8	7.7	4.29
Colorado	Obama +06.6	Bush +04.7	1.82	5.2	5.89
Connecticut	Obama +19.3	Kerry +10.3	-1.44	6.1	3.76
Delaware	Obama +21.0	Kerry +07.6	-1.25	4.8	4.36
Florida	Obama +03.5	Bush +05.0	-12.41	6.6	4.28
Georgia	McCain +04.0	Bush +16.6	1.11	6.5	5.30
Hawaii	Obama +41	Kerry +08.8	-2.88	4.5	5.71
Idaho	McCain +39	Bush +38.1	1.18	5	3.98
Illinois	Obama +23.5	Kerry +10.4	-0.37	6.9	5.23
Indiana	McCain +01.7	Bush +20.7	1.77	6.2	4.72
Iowa	Obama +11.0	Bush +0.7	1.83	4.2	5.75
Kansas	McCain +21	Bush +26	1.26	4.8	5.01
Kentucky	McCain +13.7	Bush +19.9	3.05	7.1	5.01
Louisiana	McCain +16	Bush +14.5	2.68	5.2	3.79
Maine	Obama +16.2	Kerry +09.0	2.2	5.6	4.69
Maryland	Obama +23	Kerry +13	-4.02	4.6	4.31
Massachusetts	Obama +21.3	Kerry +25.1	-2.92	5.3	5.49
Michigan	Obama +14.7	Kerry +03.4	-4.66	8.7	3.45
Minnesota	Obama +13.0	Kerry +03.5	-2.22	5.9	4.77
Mississippi	McCain +10.4	Bush +19.6	3.02	7.8	5.39
Missouri	McCain +0.4	Bush +07.2	0.89	6.4	5.50
Montana	McCain +03.8	Bush +20.5	3.38	4.6	6.20
Nebraska	McCain +18.7	Bush +33.2	1.42	3.5	4.56
Nevada	Obama +07.0	Bush +02.6	-14.12	7.3	5.88
New Hampshire	Obama +11.8	Kerry +01.3	-2.11	4.1	3.71
New Jersey	Obama +15.3	Kerry +06.7	-2.92	5.8	4.80
New Mexico	Obama +07.3	Bush +0.7	1.69	4	7.46
New York	Obama +29.7	Kerry +18.3	-0.81	5.8	6.27
North Carolina	Obama +02.6	Bush +12.4	3.59	7	5.46
North Dakota	McCain +14	Bush +28	3.56	3.6	13.62
Ohio	Obama +05.8	Bush +02.1	-0.28	7.2	4.16
Oklahoma	McCain +29	Bush +32	4.93	3.8	7.23
Oregon	Obama +15.2	Kerry +04.2	-0.53	6.4	5.12
Pennsylvania	Obama +09.3	Kerry +02.5	1.36	5.7	4.89
Rhode Island	Obama +22.7	Kerry +20.8	-4.85	8.8	4.15
South Carolina	McCain +10.0	Bush +17.1	3.28	7.3	5.94
South Dakota	McCain +17	Bush +21.5	3.77	3.2	7.87
Tennessee	McCain +14.0	Bush +14.3	2.66	7.2	5.63
Texas	McCain +13.0	Bush +22.9	3.55	5.1	7.94
Utah	McCain +32	Bush +45.5	1.87	3.5	4.44
Vermont	Obama +24	Kerry +20.1	1.6	5.2	4.67
Virginia	Obama +06.5	Bush +08.2	-2.6	4.3	4.75
Washington	Obama +17.0	Kerry +08.2	0.56	5.8	5.71
West Virginia	McCain +08.0	Bush +12.9	3.44	4.5	5.92
Wisconsin	Obama +11.7	Kerry +0.4	1.04	5	4.09
Wyoming	McCain +19	Bush +40	4.36	3.3	7.98

Source: Real Clear Politics, Federal Housing Finance Agency, Bureau of Labor Statistics, Bureau of Economic Analysis

Notes: Home price data based on change from second quarter 2007 to second quarter 2008; Unemployment rate as of September 2008; Personal income data based on change from second quarter 2007 to second quarter 2008