Political analysts will spend months combing through all the data on why President Barack Obama was reelected, and why his Republican challenger Mitt Romney lost. But one thing we know right away is that the economy was voters' top concern—and they apparently felt good enough to grant Obama another four years.
Obama pulled off the neat trick of being the first president since FDR to get reelected with the unemployment rate close to 8 percent. But Obama also had a few things trending in his favor, as U.S. News documented during the final weeks of the campaign with our unique Obamanometer, which measured whether daily developments in the economy favored Romney or Obama. In mid September, they clearly favored Romney. By early October, the Obananometer needle had begun to seesaw between both candidates. By late October, it had shifted to Obama's side, where it stayed.
There were four things that went Obama's way, just when he needed the boost:
Gas prices fell. In the month leading up to Election Day, the average price of gas fell from $3.82 per gallon to $3.46, according to AAA. That occurred for a variety of reasons, including a typical seasonal decline, weak demand for oil in troubled Europe, and the end of U.S. supply disruptions caused by bad weather and other anomalies. Importantly for Obama, he didn't need to tap the Strategic Petroleum Reserve to lower gas prices, which would have brought charges of political expediency, and might have backfired. Many voters still felt gas prices were too high on Election Day (when don't they?) but the nearly 40-cent drop prior to that certainly eased the pressure on their wallets.
The job market picked up. The numbers for September and October were far from spectacular, with employers adding just 160,000 jobs on average during the two months prior to the election. That's less than needed to keep up with population growth. But Obama is right that the job market is going in the right direction, with nearly 4.5 million jobs added since early 2010, and not one month of job losses since then.
Another important trend that gets less attention: Layoffs are at very low levels, since most companies have axed all the workers they can. For the 134 million Americans who still have jobs, that means job security is improving and they're getting less anxious about calamity lurking around the corner.
The stock market held onto big gains. Since it bottomed out in March 2009, the stock market has soared by about 110 percent, including a gain of about 12 percent so far this year. There have been some gut-wrenching ups and downs, but in general investors are getting used to volatility—and they're feeling a lot better about portfolios that have largely been repaired since the crash that began in 2008.
A lot of the credit for this goes to the Federal Reserve, which has deliberately pursued easy-money policies meant to reinflate the value of assets such as stocks and homes. Obama doesn't dictate Fed policy. Still, any president gets credit for what goes right on his watch, just as he gets the blame when things go sour. So whether meaning to or not, the Fed aided Obama's reelection effort.
Consumers grew more confident. Nobody's quite sure why, but virtually all surveys of consumers over the past few weeks have shown that their mood is improving and they're growing more optimistic. That's somewhat odd, because business leaders have been getting gloomier as they anticipate the coming political fight over the "fiscal cliff," which is already depressing economic activity. But ordinary consumers may be ignoring that, or they may sense something hopeful that their bosses don't. If they turn out to be right, it's good news for all of us.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.