Are presidential elections good or bad for California’s economy? – Daily News

on Jan6
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Welcome to another presidential election year in which political theater will, no doubt, impact California’s economy.

It’s a given that the quadrennial battle for control of the White House injects uncertainty into spending plans for corporations and consumers alike.

Yet, you can also assume that the political parties in power will do what they can to keep the economy humming in an election year – with pocketbook issues usually heavy on the minds of voters.

The mystery is what matters more: the uncertainty about future economic policy or economic gifts provided in election years?

So I filled my trusty spreadsheet with the annual average performances of eight economic yardsticks, seeking to see how business conditions changed during the past 11 election years dating to 1980. The focus was on how growth rates of certain business metrics fared in election years.

Basically, did the economy improve or regress as the national political debate reached its four-year pinnacle?


Ponder the patterns, with some California flavor mixed in, and election year extremes …

Business output: The US economy – looking at Gross Domestic Product’s growth rate – improved in only six of these 11 election years. That ranged from a 3.6-percentage-point jump in the GDP pace in 1992 (when George H. Bush lost reelection just after a recession ended) to a 4.7-point dip in pandemic-scarred 2020 (when Donald Trump lost reelection).

  • INFLATION TRENDS: What’s up? What’s cheaper? What’s next?CLICK HERE!

The Fed: If you think the Federal Reserve helps the White House, history suggests otherwise. The central bank’s key Fed Funds rate rose in seven of 11 election years – ranging from a 2.2-percentage-point jump in 1980 (when Jimmy Carter lost reelection amid major inflation woes) to a 3.1-point dip in 2008 (when Barack Obama won the White House during the Great Recession).

Inflation: Remember, the Fed eyes the cost of living. And the US inflation rate increased in eight of 11 election years – ranging from a 2.2-percentage-point jump in 1980 (Ronald Reagan victory’s over Carter) to a 1.2-point dip in 1992 (Bill Clinton’s victory over Bush).

Hiring: Employment growth in California improved in six of 11 election years – ranging from a 3.4-percentage-point surge in 1984 (Reagan’s reelection) to a 9.3-point dip in 2020 (Joe Biden won the White House from Trump).

Incomes: Elections seem good for pay growth, with California per capita income increasing in seven of 11 election years – ranging from a 3.9-percentage-point improvement in 2020 that included lots of pandemic stimulus (Biden’s win) to a 3.2-point 9dip in 2008 (Obama’s win).

Homes: California’s home appreciation rate – as measured by the Federal Housing Finance Agency – increased in six of 11 election years, ranging from a 10-percentage-point improvement in 2004 (Reagan reelection) to a 15-point dip in 2008 (Obama’s victory).

  • RENT TRENDS: What’s available – and what are landlords charging? CLICK HERE!

Mortgages: Home loans tend to get cheaper, with the 30-year mortgage rate falling in six of 11 election years – ranging from a 2.5-percentage-point jump in 1980 (Carter loss) to a 0.9-point dip in 1992 (Clinton victory).

Stocks: Wall Street dislikes election year uncertainty, as stocks gains – as measured by the Wilshire 5000-stock index – improved in only four of 11 election years, ranging from a 15-percentage-point increase in 2012 (Obama’s reelection) to a 42-point collapse in 2008 (Biden’s win).

Bottom line

What does this mean for 2024, financially speaking?

History says economic growth improves more than half the time when the presidency is at stake.

  • REAL ESTATE NEWSLETTER: Get our free ‘Home Stretch’ by email. SUBSCRIBE HERE!

But that’s no guarantee of economic outperformance. Remember, half of the last six recessions were in election years – 1980, 2008, and 2020.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at

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