Economic forecast grim for Democrats trying to hold on to Congress
One of the nation’s top economists on Wednesday predicted rising unemployment and falling housing prices, which could spell trouble for Democrats’ efforts to maintain control of Congress.
Michael Bonfigli/Special to The Christian Science Monitor
One of the nation’s top economists offered two predictions Wednesday that could well spell additional trouble for Democrats’ efforts to maintain control of Congress.
Speaking at a Monitor-sponsored breakfast for reporters, Mark Zandi, chief economist of Moody’s Analytics and co-founder of Economy.com, said he thought housing prices would continue to fall and that the unemployment rate “is going to drift higher. If it is 10 percent on Election Day, I am not sure I would be surprised.” The jobless rate was 9.5 percent in July.
Both home prices and the jobless rate are highly visible economic indicators, and incumbent parties tend to do poorly in elections when the unemployment rate is rising. Falling home prices make voters feel poorer – not a feeling that helps incumbents.
The latest reports underscore the economic weakness inherent in Mr. Zandi’s predictions. The Commerce Department reported Wednesday that orders for durable goods, when the volatile transportation sector is removed, fell at the steepest rate since January. In a separate report, the Commerce Department said that sales of new homes fell 12.4 percent in January to a seasonally adjusted annual rate of 276,000. That was the slowest pace on record.