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How Will The US Economic Outlook Affect The Presidential Elections?

How will the current US economic outlook affect the presidential elections? It is impossible to tell with complete certainty, and there are many opinions and beliefs in this area. For some economic experts the slow economy may make it difficult for the incumbent president to get reelected. Others point out that many voters vote according to factors that do not include the economy, and this means that the impact may be much smaller than what some experts expect.

There is little doubt that the economy will play some role in the presidential elections. What experts can not agree on is just how big of a role this factor will play. Some individuals in economic circles point out that it is rare for a president to win a second election if the rate of unemployment is more than 8%, but this is not impossible to do and presidents have managed this in the past.

The US economic outlook may cause some voters to vote for the challenger based on the belief that change is needed to cause an increase in confidence and the economy both. The beliefs and views of each politician will also be important to many voters, and this factor may outweigh economic factors when voters consider which candidate to choose. A voter who is unemployed and can not find work may vote based on these factors, while a voter who is employed and financially stable may make a different presidential candidate choice.

There are many factors that can impact a presidential election, and the state and current outlook of the economy can make a difference when it comes to some voters. Whether this affects many votes or just a few will not be known until after the elections are over and the winner has been decided.

It is no secret that the US economic outlook right now is not a good one. The economy could prove to be a drag on the current president and cause him to lose votes. On the other hand voters could choose to give the current president more time to turn things around. It could go either way.

5 Ways To Improve The US Economic Outlook

1. Create Jobs With Livable Wages- For the US economic outlook to improve the number of jobs created must exceed the number of jobs lost. In addition the new jobs can not be low wage jobs that hurt the middle class and barely pay a living wage. The unemployment numbers must go down, and jobs need to be available for those who want them. Confidence in the future direction of the government is crucial for this to occur.

2. Increase Consumer Spending- Increasing the consumer spending that is done will improve the outlook for the US economy. This can only be done by making consumers confident about the future and their financial security. Many consumers today do not spend money on luxuries very often because of the economic uncertainty. Government stimulus attempts rarely work because consumer confidence does not increase, and these are funded with taxpayer dollars which increases the national deficit.

3. Increase Home Investments- Improving the US economic outlook can occur if the housing market picks back up. There are a number of methods that can be used to encourage Americans to buy homes and take out mortgages. It is important that there are safeguards in place to prevent another financial crisis like the one that recently occurred. This includes verifying information about the individual requesting a mortgage loan and making sure that the payments are affordable in each case.

4. Get Businesses To Hire And Expand- When businesses hire and expand this creates economic growth. Right now companies are not taking these steps because many feel the current administration is against business and this makes for uncertainty. Business owners hesitate to increase the number of employees or the company size when it is not known what the requirements and business regulations in the near future will be.

5. Reduce the Trade Deficit- Lowering the trade deficit would increase the US economic outlook. This can be done using tariffs, import penalties, and other measures. Until the imports and exports of the USA are close to even this will reflect in the economic outlook for the United States that many analysts provide.

5 Reasons Why The US Economic Outlook Is So Grim

1. High Unemployment And Low Job Creation- The grim US economic outlook is based in part on the jobs and unemployment data that is collected. Right now job creation is barely keeping pace with the jobs lost each month, and unemployment is still more than 8% using the official numbers. It has been several years since the financial crisis but employment has not bounced back. Many of the new jobs created are low wage jobs, and this also has an impact.

2. A Fall In Housing Prices- Housing prices are close to rock bottom right now, and this does not look like it is turning around any time soon. Many lenders have tightened the standards needed to qualify for a mortgage, and there are thousands of homes in many areas that are vacant and have been on the market for at least a year. Some homeowners find that they now owe much more than their home is currently valued at.

3. High Energy Prices- The US economic outlook right now is also bleak because of the high energy prices that are seen across the nation. Gas is around $4 a gallon in many areas, and in some places it is much higher. A push for renewable energy has also caused electric and other utility prices to rise as well. The higher cost of energy leaves less money for consumers to spend in other areas.

4. The Drought And High Food Prices- The drought during the summer caused many farmers to lose corn and other crops, much of which is used in the food supply for Americans and other countries. In addition the government mandate for diverting corn and soybeans to be used for fuel production may cause food prices to go up even more.

5. Less Consumer Spending- Part of the poor US economic outlook involves consumer spending. Many polls show that a majority of Americans feel the country is headed in the wrong direction. Consumers are unsure about their financial future so they are spending as little as possible and holding on to their money instead. This lowers the retail spending that occurs, which hurts the economy even further.

When Will the US Economic Outlook Improve?

Will the US economic outlook improve any time soon? Maybe yes and maybe no, depending on which analyst or expert you ask. There are some positive signs that may indicate the recent economic troubles are coming to an end, but these are few and far between. The unemployment rate for the nation is still above 8%, with some arguing that the true rate of unemployment is much higher. The housing market is down, investors and consumers have no confidence about the future, and lending activity is almost nonexistent.

Some experts point to the fact that new housing construction is up as a sign that the economy is improving, even though housing prices are still extremely low when compared to values 10 years ago. Retail sales and the trade deficit are also factors that are bringing down the economic outlook for the USA. Retail sales have picked up some since the first 6 months of 2012, but this growth is weaker than previous years.

The US economic outlook also considers the trade deficit, and this deficit is expected to be more than $600 million by the end of 2012. Oil makes up part of this deficit, and the price of this commodity continues to increase as the year goes on. The growth of imports into the USE will be higher than the exports from the country, and this will cause the GDP growth to decrease even further.

Energy prices and food prices have seen tremendous increases in 2012, and the drought that has caused a loss of crops across the nation also has an impact. Many experts in the economy predict that the outlook for the USA will not improve significantly for the next year or two, and consumers will continue to struggle as the economy continues to falter.

The US economic outlook is not expected to improve in the immediate future. It could take several more years before the economy is actually thriving again, and there are many possible factors that can affect whether the economy picks up or not. Some hope that by the end of 2013 or the middle of 2014 the economy will have rebounded considerably, but others predict this will take much longer.

5 Factors That Affect The US Economic Outlook

1. Employment- Part of the basis for the US economic outlook is the employment numbers. The number of Americans who are employed, as well as the number of unemployed Americans who apply for unemployment benefits, make up part of the information that the economic outlook is based on. The number of jobs created needs to exceed the number of jobs lost by a substantial amount in the USA for ideal economic growth. In the last few years this has not happened.

2. Housing- The housing market also plays a role in determining the outlook for the economy. In recent years housing prices have dropped, and today many Americans have either lost their homes entirely or find themselves underwater, with a mortgage amount that exceeds the vale of the home even after years of payments. The housing market has rebounded slightly and new construction is up but many homes are still valued far below what they were a few years ago.

3. Business Spending- Business spending is also part of the US economic outlook. Businesses will spend money when the owner is certain about what the future holds. This means company expansions, job creation, and owners who are willing to invest back into the company. When the future is uncertain then most businesses will hold this capital instead, in case it is needed for other purposes.

4. Inflation- The rate of inflation and also the interest rates in place will affect the outlook for the US economy. A healthy rate of inflation and reasonable interest rates are a sign of a thriving economy. Right now interest rates are close to zero in the USA, and the rate of inflation is around the same. Lenders are not lending, even after the bank bailout and all of the taxpayer funds that were supplied to keep the financial institutions in business.

5. GDP- The GDP is part of the US economic outlook. This factor reflects the rate of growth that the economy has seen, and generally double digit growth is ideal. Right now this rate in America is just 2%, which is very low and signals that the economy has not fully rebounded after the crisis a few years ago.