Obamanometer: Gas Prices Now Helping Obama

And they could keep falling through Election Day.

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The Federal Reserve's latest stimulus move is no longer goosing the stock market, which leaves little air under the economy at the moment. But one emerging trend is poised to help President Obama in the final weeks of this year's battle for the White House: falling gas prices.  

 Until recently, gas prices had been creeping toward their highest point of the year, close to $4 per gallon. But they've recently reversed course, following a slide in the price of oil. Gas prices are now around $3.81 on average, according to AAA, which is down about five cents from a week ago.

That shifts our Obamanometer reading slightly into Obama territory, following a week in which it slightly favored GOP presidential contender Mitt Romney:

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Gas prices could continue falling, for at least two reasons. Oil prices have been in retreat, mostly because there's little spark in the global economy, other than central-bank stimulus measures, which seem to have played out for the time being. Gas prices also typically fall once summer ends, as refiners move to cheaper winter blends that aren't suitable in warmer weather.

Forthcoming reports on housing and consumer confidence could be the next bits of news that move the needle on the Obamanometer. Consumers have been growing gradually more optimistic—though some economists wonder why. And housing has been improving, if somewhat fitfully. With no strong movement in either direction, the state of the economy remains a political tossup.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman

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Methodology: The Obamanometer measures 22 economic metrics in 11 broad categories: the S&P 500 stock index, the price of gas, the unemployment rate, other job indicators, consumer confidence, leading economic indicators, inflation, housing, personal income, consumer spending, and the risk of recession as calculated by Moody's Analytics. The S&P 500 index and gas prices are updated daily, based on the level of change from one week prior. Other indicators are updated weekly or monthly as they come out. Changes are coded on a seven-point scale ranging from -3 to +3, with -3 representing a strongly negative economic development that favors Romney, and +3 indicating a strongly positive development that favors Obama. A score of 0 indicates no meaningful change. The individual scores are averaged each day on a weighted basis. The S&P 500 index, gas prices and the unemployment rate are weighted to represent one-half of the index value, since those are the most highly visible economic indicators. The other metrics represent the other half of the index value. Each day's overall Obamanometer reading ranges somewhere between -3 and +3. In visual terms, an overall reading of -3 would be represented by the needle pointing all the way to the left, while +3 would be represented by the needle pointing all the way to the right. If the overall reading were 0, the needle would point straight up.