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Presidents Lose When There’s an Election-Year Recession—But Will Trump?
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On Monday, the National Bureau of Economic Research—the official government arbiter of recessions—formalized what most people already assumed: The U.S. economy entered a recession in February. The timing could hardly be worse for President Trump, who’s up for reelection in less than five months.
Voters often oust presidents and their parties when the economy goes into recession in an election year. We know this because the NBER has data measuring business cycles and calling the beginning and end of recessions since the 1850s, when Franklin Pierce was president.
The first thing that stands out when parsing the historical record is Trump’s incredible bad fortune. Despite this lengthy timespan, presidential-election-year recessions are quite rare. According to NBER data, the economy went into recession in the third quarter of 1860. With Democratic President James Buchanan having decided not to seek reelection, his party split into northern and southern factions over the issue of slavery (each producing a nominee), and Republican Abraham Lincoln was elected.
It took 60 years for another election-year recession to hit, in January 1920. Democratic President Woodrow Wilson had hoped to run for a third term. But party leaders spurned the unpopular incumbent and settled on dark horse James M. Cox, who lost to Republican Warren Harding in a landslide.
The economy next entered an election-year recession in 1948, but this one warrants an asterisk(*): The NBER dates the beginning of this recession to November 1948. The election took place on November 2. Was the economy in recession when Democratic President Harry Truman faced down Thomas Dewey? Impossible to say. Either way, it was a notoriously close contest.
The 1960 race was more obviously colored by the backdrop of a recession that began in April of that year. With Republican President Dwight Eisenhower term-limited, his vice president, Richard Nixon, lost narrowly to Democrat John F. Kennedy (and helped foster Nixon’s obsession with the economy-boosting powers of the Federal Reserve when he did become president).
That brings us to 1980, the election-year scenario that most closely aligns with our current race. On June 3, the NBER’s Business Cycle Dating Committee gathered in Cambridge, Massachusetts, and declared January 1980 to have been the “peak in U.S. business activity”—the onset of a recession. That was terrible news for Democratic incumbent Jimmy Carter, who lost his reelection bid to Republican Ronald Reagan five months later.
Given the small sample size and many additional factors that inform voter behavior, the predictive value of this exercise is certainly open for debate. But the historical record of incumbent presidents and parties—0 - 4 - 1*, by my measure—and plain common sense suggest that diving into recession in an election year is an almost insurmountable albatross in a presidential election. Even recessions that begin just before an election year, like the one we slipped into in December 2007, have powerful political effects.
President Trump, acutely aware of this peril, is doing all he can to talk up the economy. That seemed fruitless, until Friday’s blockbuster jobs number shocked economists who had been anticipating more misery. The sudden turnaround in the labor market raised the possibility that the economy could grow fast enough between now and November for Trump to defy the historical record and win another term.
It’s something the NBER considered 40 years ago, when discussing the recession that ultimately did in Carter. The committee declared that the recession had begun in January. But its announcement contained a noteworthy proviso: “unless there is an extraordinarily sharp and quick reversal of activity.”
That didn’t happen for Carter. But there’s at least a possibility that it still could for Trump.
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Voters often oust presidents and their parties when the economy goes into recession in an election year. We know this because the NBER has data measuring business cycles and calling the beginning and end of recessions since the 1850s, when Franklin Pierce was president.
The first thing that stands out when parsing the historical record is Trump’s incredible bad fortune. Despite this lengthy timespan, presidential-election-year recessions are quite rare. According to NBER data, the economy went into recession in the third quarter of 1860. With Democratic President James Buchanan having decided not to seek reelection, his party split into northern and southern factions over the issue of slavery (each producing a nominee), and Republican Abraham Lincoln was elected.
It took 60 years for another election-year recession to hit, in January 1920. Democratic President Woodrow Wilson had hoped to run for a third term. But party leaders spurned the unpopular incumbent and settled on dark horse James M. Cox, who lost to Republican Warren Harding in a landslide.
The economy next entered an election-year recession in 1948, but this one warrants an asterisk(*): The NBER dates the beginning of this recession to November 1948. The election took place on November 2. Was the economy in recession when Democratic President Harry Truman faced down Thomas Dewey? Impossible to say. Either way, it was a notoriously close contest.
The 1960 race was more obviously colored by the backdrop of a recession that began in April of that year. With Republican President Dwight Eisenhower term-limited, his vice president, Richard Nixon, lost narrowly to Democrat John F. Kennedy (and helped foster Nixon’s obsession with the economy-boosting powers of the Federal Reserve when he did become president).
That brings us to 1980, the election-year scenario that most closely aligns with our current race. On June 3, the NBER’s Business Cycle Dating Committee gathered in Cambridge, Massachusetts, and declared January 1980 to have been the “peak in U.S. business activity”—the onset of a recession. That was terrible news for Democratic incumbent Jimmy Carter, who lost his reelection bid to Republican Ronald Reagan five months later.
Given the small sample size and many additional factors that inform voter behavior, the predictive value of this exercise is certainly open for debate. But the historical record of incumbent presidents and parties—0 - 4 - 1*, by my measure—and plain common sense suggest that diving into recession in an election year is an almost insurmountable albatross in a presidential election. Even recessions that begin just before an election year, like the one we slipped into in December 2007, have powerful political effects.
President Trump, acutely aware of this peril, is doing all he can to talk up the economy. That seemed fruitless, until Friday’s blockbuster jobs number shocked economists who had been anticipating more misery. The sudden turnaround in the labor market raised the possibility that the economy could grow fast enough between now and November for Trump to defy the historical record and win another term.
It’s something the NBER considered 40 years ago, when discussing the recession that ultimately did in Carter. The committee declared that the recession had begun in January. But its announcement contained a noteworthy proviso: “unless there is an extraordinarily sharp and quick reversal of activity.”
That didn’t happen for Carter. But there’s at least a possibility that it still could for Trump.
QUICKTAKE ON SOCIAL:
QuickTake by Bloomberg is a global news network delivering up-to-the-minute analysis on the biggest news, trends and ideas for a new generation of leaders.
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