The U.S. Bureau of Economic Analysis will release the third quarter gross domestic product (GDP) report on Thursday, five days before the election.
Christopher Way, associate professor of government at Cornell University, studies the political business cycle and focuses on the effects of electoral cycles and the desire of leaders to stay in power. He says that the lived experience matters the most as voters consider the economy, and shifts to GDP this late in the year are unlikely to change minds.
“The figure for estimated GDP growth in the third quarter will be released five days before the election. It will be dramatic. It will be record setting. It will be confusing. It will get large amounts of media coverage. And it will have absolutely zero effect on the election.
“Economic performance does affect election outcomes. But there are three important things to note about the third quarter growth figure. First, research shows that it is economic performance in the first half of an election year that matters. After mid-summer, the economy is ‘baked in’ as far as the election is concerned. Voters have formed their impression; late swings, whether upwards or downwards, have small effects. Second, with heightened partisanship, voters are adept at interpreting national aggregate figures through a partisan lens. Republicans will see positive signs in the figure, and Democrats will write it off as meaningless bounce-back following a record-setting decline in the second quarter. Few will change their views. Third, local economic pain that is personally experienced matters most. If national figures are out of sync with lived experiences, it is the personal experiences of self, family, and friends that prevail.
“For people who are still out of work or struggling with dwindling savings after the stimulus wears off, national figures will have little impact.”