Forget About Unemployment Rate — S&P 500 Bigger Nov. 6, Study Finds

Photograph by Scott Eells/Bloomberg

A trader works at the New York Stock Exchange.

No matter what the unemployment rate is, a president is more likely to be re-elected if the stock market rose on his watch, according to a study by four university professors.

The report by Robert Prechter and Deepak Goel of the Socionomics Institute, Wayne Parker of Emory University and Matthew Lampert of the University of Cambridge studied every American election involving an incumbent since George Washington first stood for re-election in 1792.

It found no “significant relationships” between vote margins and either inflation or unemployment.

“The best single predictor of presidential re-election results that we found was the percentage change in the stock market during the three years that preceded Election Day,” Goel said. “Unemployment had no predictive value in any of our tests.”

So as Republicans at their presidential nominating convention  in Tampa cite an unemployment rate above 8 percent, President Barack Obama can take solace in the fact that the Standard & Poor’s 500 Stock Index has risen 75 percent since he was inaugurated on Jan. 20, 2009.


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