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Low gas prices could put Dem in White House, says economic model

Low gas prices could put Dem in White House, says economic model
© Greg Nash

Low gas prices could give Democrats a third straight term in the White House, an economic election model said Monday. 

The March Moody's Analytics prediction shows that the Democratic nominee will win in November as long as prices at the pump stay low.

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But without gas prices factored into the equation, the Republican nominee would have the edge.  

"The two drivers giving the most support in the model to Democrats are gasoline prices and the president’s approval rating," wrote Dan White, a Moody's economist who compiles the monthly election forecast.

"In fact, without gasoline prices in the model, Republicans would be projected to win," White said. 

Between the combination of President Obama's rising popularity and low gas prices, there is little room for Republicans to win in November, according to the model.

For example, the president's approval rating would have to drop to 45.7 from 52 percent and gas prices would need to rise sharply to $3.53 a gallon to shift the model into the GOP's favor.

Even though prices have ticked up recently, the national average for a gallon of regular unleaded gasoline is sitting at $2, according to AAA. 

Gas prices are expected to be around $2.93 per gallon on Election Day. 

In an earlier analysis, White said the chances are remote that gas prices will move enough by November to alter the projected outcome.

However, the president’s approval rating "is a variable that could move quickly enough, in concert with higher gasoline prices to change the forecast." 

The president's approval rating is at 52 percent and has been rising against the backdrop of a chaotic primary season.

Moody's latest model shows Democrats would win the electoral college vote 332 to 206 over Republicans. 

However, several important swing states remain extremely close.

"Nevada, Ohio, Colorado, Virginia, Florida and New Hampshire could all swing very easily with only small changes to the underlying economic drivers," White said Monday. 

Democrats have held the edge in the model since the first one for 2016 was released, in August. 

"The economic variable most beneficial to the Republican challengers in the model is household income growth, which has come in below expectations much of the year," White wrote in the March analysis on Monday.

"As we near full employment toward the end of the summer, we’ll have a better idea how large a role slower growing wages will be on the election. But as of today, the forecast is clearly in favor of the incumbent party."