Our daily gauge of whether the economy is helping or hurting President Barack Obama has now swung in Mitt Romney's direction, largely due to a retreat in stock prices.
Stocks rose in early September, following the Federal Reserve's latest stimulus program, but they've been drifting back down lately. Investors anticipate weak third-quarter earnings, plus, CEOs are growing spooked about the "fiscal cliff" approaching at the end of the year.
Our latest Obamanomter reading is the second-lowest since we kicked off the feature in September. The needle may tick back in Obama's direction if stock prices level off this week. Obama has also been benefitting from falling gas prices and modestly good news about the housing market.
This week's big economic news will be several reports on the labor market, culminating with the government's monthly unemployment report, due Friday. Hiring has slowed dramatically throughout 2012, and most indications suggest the upcoming jobs report will be weak. If so, it will tip the Obamanometer further to Romney's side. Check back for updates.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman
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.