Today’s big news for those interested in knowing the outcome of the presidential race? I’d say it’s the terrible number for manufacturing:
U.S. manufacturing shrank in June for the first time in nearly three years, adding to signs that economic growth is weakening.
Production declined, and the number of new orders plunged, according to a monthly report released Monday by the Institute for Supply Management.
One analyst described the news as “terribly weak.”
Among other things, this is a good reminder that this is jobs week. The new unemployment data will be out this Friday morning.
Of course, no one should panic (or rejoice) about any single report. There’s also been some good news: Just today, after all, we learned that May construction increased at a healthy pace.
What to make of it all? I’d put it this way. There are lots of economic reports every week. If all of them were to suddenly start coming up positive — or all of them start coming up negative — then there could certainly be a major effect on the presidential race. As long as the indicators are mixed, however, we’re still looking at something close to a 50-50 race, perhaps with Barack Obama as a slim favorite.
Also, political science tells us that the economic performance this year will matter far more when it comes to voting than that of previous years . And perceptions of the direction of the economy are more important than overall conditions at any given moment.
So as important as everything about health care is substantively, don’t forget that for the election, the economy is likely to make a lot more of a difference. And to the extent that health care does matter, the political outlook is not apt to change just because the court ruled. We certainly could get minor shifts in voting from spin wars and paid ads, and if it’s a very close race those minor shifts could be important. But any major changes to come will be driven by events, of which the economy is easily the most important. So don’t lose sight of the economic news — especially Friday’s jobs report.