The jobs report could mean bad news for Donald Trump.
The impressive non-farm payrolls of 242,000 and an unemployment rate that remained at 4.9% put even more downward pressure on what’s known as the “Misery Index,” an unofficial economic measure calculated by adding the unemployment rate and inflation.
This indicator, created by economist Arthur Okin, has become a staple of election-year commentary and has an impressive record of predicting the outcome of U.S. presidential elections since the middle of the last century. The current index, at a 25-year low, suggests the Democrats will retain control of the White House this year, according to Bloomberg’s Chief U.S. Economist Carl Riccadonna.
“Historically, gains in the index as Election Day approaches have augured poorly for the incumbent party. But with the jobless rate tumbling and inflation only inching higher, the signal this year points toward a Hillary Clinton or Bernie Sanders victory,” Riccadonna said.
The latest strong jobs number, along with meager inflation–core CPI registering 2.2%–puts the effective level of the Misery Index at 7.1, which can be seen in the red line below.