Presidential Approval Rating vs. Stock Market Returns

Regular readers of the USA Today's print and online versions know that the paper usually does an excellent job of displaying original and informative graphics, but one we saw yesterday was particularly interesting. The chart showed historical Presidential approval ratings strung together since Harry Truman's Presidency through the present. The chart provides an interesting look at how Presidents have been viewed by the public throughout history. If you go to the article, you can also compare approval ratings of each President and other interesting stuff.

When looking at the complete history of approval ratings, it was hard to believe that even though he left office as one of the most unpopular Presidents ever, at one point George W. Bush's approval rating was higher than any other President in the post-WWII era. Ironically, the prior record appears to be held by his father, whose popularity also hit its lowest levels near the end of his first and only term. Likewise, while Reagan has been viewed positively by both Republicans and Democrats, he and Nixon (and Obama so far) are the only post-WWII Presidents who never saw their approval ratings break above 70%.

Taking the USA Today's look at Presidential approval ratings one step further, we added a chart of the S&P 500's year over year (y/y) performance during each President's term to see how a President's popularity was tied to the stock market. Not surprisingly, there is a strong relationship between the stock market's performance (which reflects the economy) and how a President is viewed. Presidents who were in office while the stock market was strong typically have been more popular and vice versa.

In recent history, however, the relationship has been less consistent. For example, George W. Bush's popularity peaked when the market was weak, and as the stock market improved up until 2007, his popularity continued to decline. Likewise, while it's still early in his first term, President Obama came into office with an approval rating of 64%, but even though the markets have shown considerable improvement, his approval rating has seen a decline to 55%.

click to enlarge

Comments

[John Galt:]

"It's the economy stupid."

Having a general correlation makes sense... GWB benefited from the post 9-11 unity, Clinton was impeached ( although not taken out of office), and Obama has a lot of people that love him and a lot of people that hate him.

Isn't it funny how most presidents approval ratings start off high, and then trend downward and end lower than where they started? The big exception here really was Clinton.

I guess it means people place high hopes on these politicans, believe the hype, and then come back to reality until a new guy comes along...

Jul 22 01:22 PM

[Steve in Gr...:]

"...but even though the markets have shown considerable improvement, [Obama's] approval rating has seen a decline to 55%."

Fox Butterfield lives!

Typical Butterfield NYT headlines are the following:
"Crime Keeps On Falling, but Prisons Keep On Filling";
"Despite Drop in Crime, an Increase in Inmates"

Jul 22 01:27 PM

[Socialism c...:]

Perhaps what it really shows is that the people voted for someone they really did not get to know enough about during the campaign. Media does a fine job of masking undesirable facts about candidates it happens to be behind.

> Isn't it funny how most presidents approval ratings start off high,
> and then trend downward and end lower than where they started? The
> big exception here really was Clinton.
>
> I guess it means people place high hopes on these politicans, believe
> the hype, and then come back to reality until a new guy comes along...

Jul 22 01:48 PM

[dybydx:]

a more relevant matching is probably prez rating vs employment rate.

when ppl lose jobs, they feel upset, they wanna grind someone for it.

Jul 22 02:14 PM

[John Galt:]

It's like dating.

You first start dating somebody and see what you want to see. You look at the good in that person and push the bad off to the side. You like being around that person for their positive traits.

Then at some point you become comfortable with that person, you are used to their positives, but you start to evaluate their negatives more. Instead of pushing the negatives off to the side, you must confront the things that bother you.

In the beginning everybody is on good behavior and you see the +'s, but before the break up you see the true person and get sick of the -'s.

One of the problems with Obama is that most people didn't know much about him besides what he told us about himself in his books. He had minimal political experience "vote present", he was very low key in college, and his past is little known besides his own writings. A lot of people are spooked by what they see, but there are still a lot of people that get swept up by his speeches and love him. Right or wrong of course.


On Jul 22 01:48 PM Socialism cannot compete! wrote:

> Perhaps what it really shows is that the people voted for someone
> they really did not get to know enough about during the campaign.
> Media does a fine job of masking undesirable facts about candidates
> it happens to be behind.

Jul 22 02:32 PM

[tonny adamms:]

If only folks had thought of the Presidential Unfinished Business that Obama had inherited,thought of the Global Mess left behind by the outgoing President and put on the shoulders of incoming President Obama,very few would ever dare of even talking about downward rating in comparison to the other outgone Presidents whose assumptions of Presidential rule do not simply hold!Holding extreme expectations on a President suppressed by overhelming global mess inherited from a former administration may result in untold frustrations on the part of electorates!Dare on Obama!

Jul 23 10:38 AM

[A. Nony Mouse:]

I really get tired of hearing about the "mess" that Obama inherited. Truth be told EVERY President inherits the mess left by the previous administration. Examples that come readily to mind are Eisenhower and Reagan. They didn't spend their first year whining like a little boy about they mess they were left. The oly conclusion I can draw from the current occupant of of the White House consantly grousing about the problems he inherited is A. He was too stupid to notice the problems when he was running for office. B. Lacks, the maturity, experience and judgement to solve them,that his running for the highest office in the land was merely an exercise in vanity and hubris

Jul 23 12:35 PM