How Battleground States See The Economy

A young supporter of Republican presidential candidate Mitt Romney holds a sign during an election party at the Red Rock Casino in Las Vegas in February. i i

hide captionA young supporter of Republican presidential candidate Mitt Romney holds a sign during an election party at the Red Rock Casino in Las Vegas in February.

Justin Sullivan/Getty Images
A young supporter of Republican presidential candidate Mitt Romney holds a sign during an election party at the Red Rock Casino in Las Vegas in February.

A young supporter of Republican presidential candidate Mitt Romney holds a sign during an election party at the Red Rock Casino in Las Vegas in February.

Justin Sullivan/Getty Images

For all the chatter that the winner of the 2012 presidential election will be determined by the economy, you wouldn't know it by looking at the most closely contested states.

The recovery is still tepid in most parts of the country, and there's a sense of trepidation that signs of improvement might not last. Among the swing states, some are doing comparatively well while others are struggling — but the political picture looks roughly the same in all.

The polling picture in Nevada, for instance, which has the worst unemployment rate in the nation at 11.6 percent, isn't looking much different from New Hampshire, where unemployment is just 5 percent. (The national average is 8.2 percent.)

"You would think this would be a terrible state for [President] Obama," says Eric Herzik, chairman of the political science department at the University of Nevada, Reno. "The economy's bad, it remains bad, and there's not a lot of optimism about a quick recovery."

But Nevada is where Obama enjoys one of his largest leads among the swing states, according to polling averages compiled by RealClearPolitics. Conversely, the president isn't opening up anything like a comfortable lead over Republican rival Mitt Romney in battleground states with relatively low unemployment, such as New Hampshire and Iowa.

Obama On Defense

"Even if the state itself seems not so bad as some other states, there's a sense that we're electing a president, we're not electing a governor," says Dennis Goldford, a political scientist at Drake University in Des Moines, Iowa.

The fact that the economy has been stuck in low gear explains why Obama is almost exclusively playing defense against Romney. The question of his re-election turns on his ability to hold onto the bulk of the states he won four years ago.

Indiana and North Carolina appear already out of his reach. And voters in the main battleground states remain uncertain about whether he deserves a second term. Obama maintains a slight polling lead in those states but certainly doesn't command clear majority support, mirroring the national outlook.

That's why the president is out trying to make the case that while things aren't great, they've improved on his watch and would get worse under Romney.

"This is the Democratic strategy, and maybe the only one — to shift blame either on past administrations or Europe," says Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. "That has to be what's going on, because certainly the current situation in the economy is not something you'd think someone could get re-elected on."

Other factors are at work, such as ideological and partisan leanings, and voter reactions to such issues as health care and same-sex marriage. Still, the economy remains dominant, and the presidential race remains too close to call with four months to go before Election Day.

Here are snapshots of the economic and political situations in several swing states:

Colorado

Unemployment: 8.1 percent

Rate when Obama took office in January 2009: 6.6 percent

Current polling average: Obama 47.2 percent / Romney 44.2 percent

Job growth is happening faster than expected in Colorado this year, with nearly every industry now hiring, according to a recent survey by the University of Colorado. Though their optimism has been tempered, business leaders remain positive in terms of expectations about hiring, sales and profits. "Colorado business leaders are more optimistic about the state economy than the national economy," says Brian Lewandowski, a research associate at the university's business school.

The sour mood hasn't helped Obama's chances but hasn't sunk them, either, notes Floyd Ciruli, a Denver-based pollster. Obama's polling lead here has been small yet steady. "As a targeted state, we are watching now almost nonstop ads on our local newscasts," Ciruli says. "The president's ads are overwhelmingly negative and geared toward undermining Romney on the economy."

Florida

Unemployment: 8.6 percent

Rate in January 2009: 8.6 percent

Current polling average: Obama 46.2 percent / Romney 45.4 percent

Florida's economy, which was hit hard both by foreclosures and declining tourism, has gotten a bit better. Business and professional services are doing well and international trade is taking off, particularly with Brazil and other parts of South America. "From our view and from the data's perspective, the economy has touched bottom and is increasing," says Dale Brill, head of the research and policy arm of the Florida Chamber of Commerce.

But the speed of Florida's recovery remains more tortoise than hare. As a result, consumers and people in business remain "nervous," Brill says. Depending on the poll and depending on the day, either Romney or Obama can claim a lead here. Pete Dunbar, a Republican former state legislator, says, "I would definitely put us in a tossup situation."

Iowa

Unemployment rate: 5.1 percent

Rate in January 2009: 4.8 percent

Current polling average: Obama 46.5 percent / Romney 44 percent

Iowa is lifting itself out of the recession pretty well, says University of Iowa economist John Solow. The state's major urban areas are having some success in the technology sector, while agriculture is benefiting from high crop prices. Agricultural land prices are up, and housing hasn't suffered from the same boom-and-bust cycles as the Sunbelt and other parts of the Midwest. "When the price of corn is up — and it's quite high by historical standards right now — that means business for the farm implement dealer in town and the seed dealer. And that has had an impact," Solow says.

Still, despite Iowa's relatively low unemployment rate, people are uneasy about the economy, says Dennis Goldford, of Drake University in Des Moines, Iowa. That's partly because of the unsettled national picture. The independents who pushed Democratic candidates to victory in 2006 and 2008 — and swung mightily to the GOP in 2010 — are still dissatisfied. "Iowans tend to take the general sense that the country is on the right track or the wrong track as the guiding parameter in deciding about the presidential race," Goldford says.

Nevada

Unemployment: 11.6 percent

Rate in January 2009: 9.4 percent

Current polling average: Obama 49.3 percent / Romney 44 percent

Nevada's economy contains a few bright spots: Gold mining is doing well, ranching and farming are doing OK, and Las Vegas looks ready to welcome a record number of visitors this year, says Stephen Brown, director of the University of Nevada, Las Vegas Center for Business and Economic Research. But that's about it. Tourists aren't spending as much money on average as they used to. Nevada has been a foreclosure capital, and that, coupled with the slowdown in population growth, has meant a collapse in both housing and construction. As a result, the state's unemployment rate is the highest in the nation. "I think it's going to be a while before we see a really strong recovery here," Brown says.

Perhaps because things are so bad in the state, people in Nevada are not buying the medicine that Romney is selling, suggests Eric Herzik, of the University of Nevada, Reno. Nevada is already a low-tax, low-regulation state. Romney's call to free up the free market therefore isn't resonating as well as he might like. "It's not as if Nevadans are saying Obama's economic policies are not at fault or are wonderful, but the Republican response, in a sense, has been tried in this state, and it hasn't worked, either," Herzik says.

New Hampshire

Unemployment: 5 percent

Rate in January 2009: 5.1 percent

Current polling average: Obama 48.7 percent / Romney 43 percent

Only five states have unemployment rates lower than New Hampshire's. Technology and tourism are healthy, particularly in the state's populous southern counties, near Boston and along the sea coast. Consumer confidence surveys indicate that residents see the economic picture improving in general. "You would say people in New Hampshire must feel content, very good about things," says Russ Thibeault, president of Applied Economic Research in Laconia, N.H. "But we don't, not at all."

Among the reasons Thibeault cites for this unhappiness are continuing problems with foreclosures and home prices, as well as slow job growth and "unheard of" net out-migration. People in New Hampshire are used to a fast-growing economy, and they no longer have one. Instead, the duration of what still feels like a slowdown is wearing on them. "Long story short, local conditions in New Hampshire are better than nationally, but I expect that national will trump local when it comes to the presidential race," says Dante Scala, a political scientist at the University of New Hampshire.

Ohio

Unemployment: 7.3 percent

Rate in January 2009: 8.8 percent

Current polling average: Obama 46.2 percent / Romney 43.6 percent

Four years ago, there was a palpable sense in Ohio that the economy was getting worse, and fast. There's no longer that sense, says Jason Seligman, an Ohio State University economist. Manufacturing jobs are coming back — with Obama getting some credit in parts of the state that rely on the domestic auto industry. Natural gas exploration and extraction has also been a controversial but economically fruitful industry, hiring people and creating a demand for infrastructure. "What you see in Ohio right now is generally a state that has done a pretty good job in this recovery, relative to the nation," Seligman says.

The fact remains, however, that some areas of Ohio are struggling. Even where job creation is happening, it remains a long, slow struggle. Unemployment is coming down and companies are coming back, but small and mid-sized companies have hit a "glass ceiling" in terms of growth, says Chris Widener, the Republican chair of the state Senate Finance Committee. Given the tales of struggle Widener says he still hears from people in his district, he's surprised that Obama is polling as well as he is. "Any person in the White House, regardless of party," he says, "bears the burden of how people are doing."

Virginia

Unemployment: 5.6 percent

Rate in January 2009: 6 percent

Current polling average: Obama 47.5 percent / Romney 44.5 percent

Virginia's unemployment rate is low relative to other states, thanks in large part to consistent spending by the Pentagon (which is located in Virginia) and other parts of the federal government. What's left of the old textile and furniture manufacturing sectors have held on, while much of the economy has diversified into professional and business services. Housing prices, meanwhile, are rising at a rate of about 3 percent over last year, compared with just over 1 percent nationwide.

Still, job creation is not happening as fast as in the rest of the nation. And 5 percent unemployment still sounds like a lot in a state that had 3 percent before the recession, says Ann Macheras, who leads the regional economic research division at the Federal Reserve Bank of Richmond. Employers are nervous about the effects from potential cuts to defense and other government spending, and have grown accustomed to watching the economy start to slow down again every time it appears to be picking up steam. But the fact that unemployment in Virginia is so much lower than the national rate is "a not-so-hidden advantage" for Obama, says Larry Sabato, director of the University of Virginia's Center for Politics. "Frankly, if the Obama campaign can't win Virginia, with its super-low 5.6 percent unemployment — much of it due directly to federal spending and defense infrastructure — then one wonders how they can prevail," he says.

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