President Obama has seen improved approval ratings in the past few weeks. His approval rating in the average of six polls tracked by Real Clear Politics now stands at 46.5 percent. That’s the highest the figure has been since July, and is up from a low of about 42 percent in early October.
The improvement in Mr. Obama’s numbers, while fairly modest, is potentially meaningful. A relatively simple analysis of historical data that I conducted earlier this year found that an approval rating of 46 or 47 percent has represented the rough break-even point at which presidents are equally likely to win or lose a second term. Re-election becomes unlikely but not impossible if the president is below this mark — the quality of his opponent and the presence of third-party candidates can alter the outcome — and probable but not certain if it is closer to 50 percent. (Note, however, that Mr. Obama’s disapproval ratings still exceed his approval ratings in most polls, which may be the better benchmark.)
But what is driving the change? One popular theory is that Mr. Obama is benefiting from the confrontation with Congress over the payroll tax cut:
A CNN/ORC International Poll out Tuesday also indicates that the partisan battle over extending the payroll tax cut may be partially responsible for the jump in the president’s numbers.
I would suggest that another explanation is much more plausible: Mr. Obama’s improved approval ratings reflect rising economic expectations.
The American economy is by no means in good shape — not when 13.3 million Americans remain out of work, even by the insufficiently inclusive definition that the Bureau of Labor Statistics prefers. However, there have been some promising signs.
The White House got a good headline number in this month’s unemployment report, with the unemployment rate dropping to 8.6 percent from 9 percent. Although the details of the report were not as strong, the findings have been bolstered by a steady decline in the number of initial claims for unemployment insurance, which are at their lowest levels since 2008. Meanwhile, housing starts are up, retail sales figures have been reasonably good, and various regional and national manufacturing indexes are generally coming in above expectations.
Perhaps more important from the White House’s perspective, there are clear signs that Americans are becoming less pessimistic about the economy’s performance. Gallup’s daily tracking of economic confidence has shown it rebounding to the point it was at before the debt ceiling debates of July and August, which had scared Main Street and Wall Street alike. The two major monthly consumer confidence surveys, from the Conference Board and the University of Michigan, have also shown improvement.
Again, this is not to suggest that these numbers are actually good. But they seem to have returned to a sort of equilibrium that they’ve been at for much of the last two years.
Likewise, having an approval rating of about 46 or 47 percent is familiar territory for Mr. Obama. His approval ratings have generally been in that range since January 2010, with the exceptions of rally-around-the-flag bounces following the attempted assassination of Representative Gabrielle Giffords and the killing of Osama bin Laden, and what now looks to have been a temporary dip after the debt ceiling debacle.
I am not an economic determinist who says economic numbers are the only thing that matters; the relationships are more tenuous than that. However, my view is that the economy deserves the “right of first refusal.” If you can explain a change in approval ratings based on economic attitudes — and I think you can in this case — this will usually be necessary and sufficient.
By contrast, I find it unlikely that Mr. Obama’s approval ratings are improving because he is being compared favorably to Congress. Voters can judge each branch of government on its own terms. After the debt ceiling debate, they were perfectly happy to cast a pox upon all houses, with both Mr. Obama’s and Congress’s approval ratings sliding.
This debate over interpreting Mr. Obama’s approval ratings has some implications for the current argument in Congress over the payroll tax cut. If you believe that his improved ratings reflect his outmaneuvering Congress, then perhaps it is to his benefit if the argument extends on past the new year. But if you believe instead that the ratings have more to do with improved economic confidence, this could be a dangerous game. Even if the tax cuts are eventually extended, as seems likely, a temporary decline in Americans’ take-home pay in January would nevertheless represent a disruptive influence at the very moment that Americans are starting to believe in the economy again.
Rising economic expectations also represent a mixed blessing for the White House over the longer term. To be sure, the White House would rather see these numbers rise than fall. It should be encouraging to Mr. Obama that voters now seem inclined to take a “wait and see” approach on him, rather than simply giving up on his leadership, as had seemed possible during the summer. But the economy still faces significant headwinds, most notably from Europe as well as from the ongoing process of deleveraging after the financial crisis. The consensus of economists in the Wall Street Journal forecasting panel are predicting G.D.P. growth of just 2.3 percent next year. Although these forecasts are often wildly inaccurate, the odds are against Mr. Obama benefiting from the robust growth that helped Bill Clinton win re-election in 1996 or Ronald Reagan in 1984, and it would not take all that much to tip the economy back into recession.