Pocketbook Indicators
Last Spring, when the price of gas became the topic du jour around the office water cooler, I realized that a good many Americans perceive the cost of fuel as one of the defining measures of how things are going. Whether that perception is based on reality is irrelevant. It exists and it matters to people.
After some further thought on the matter, I concluded that the two most widely known and recognized economic indicators for your average Joe Six Pack or Sally Housecoat are gas prices and the Dow Jones Industrial Average. If you drive a car, you can't help but know what the price of gas is. And if you read, watch, or listen to the news at all, you will come across the DJIA or at least know how the stock market performed that day.
And so I came up with my own completely unscientific, unresearched quick and dirty criteria to predict the outcome of the election based on these two factors.
If the Dow is above 10,000 and gas is under $2 a gallon, Bush wins.
If only one criteria is met, it's a toss up.
If neither is met, things are looking good for Kerry.
Before you rip into my model, please remember that it's nothing more than a shot in the dark. It hasn't been tested or analyzed against historical precedents. I've just been using it as my barometer to try to get a feel for what might happen on November 2nd.
And right now, I'm a bit worried. The average U.S. gas price is $2.06 a gallon, and, even though it rallied nicely today, the Dow Jones Industrial Average is at 9888.48.
Does this mean that a Kerry victory is in the bag?
Of course not. But it does make me a little nervous.
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