Economy Now

Instant reaction and smart charts on economic trends.

Swing state watch: Where do gas prices hit hardest?

March 13, 2012: 1:38 PM ET

Two new polls from The Washington Post and The New York Times show President Obama's approval rating has dropped precipitously over the past month.

In particular, Americans are not pleased with how Obama is handling the economy.

But most economic data indicates the economy -- and especially the job market -- is actually picking up steam. So what's causing this drop?

One theory is that rising gas prices are dragging down the president's poll numbers.

But this is very tricky ground. Yes, most Americans think the president has some control over gas prices. Yes, gas prices are increasing. Yes, the president's poll number seem to be trending lower.

But it would be wrong to connect the dots between higher gas prices, lower poll numbers and certain defeat for Obama in the fall.

Instead, the more compelling story is that rising gas prices have the potential to act as a drag on the economy, slowing growth and to some extent, job production. And that could eventually translate into disillusion with the president's policies, and perhaps fewer votes in November.

But if the recovery continues to gain momentum, high gas prices probably won't make or break Obama. (Nate Silver runs the numbers here.)

To the extent that gas prices do affect the election, it may be more instructive to drill down to the local level to pinpoint economies that are likely to be hardest hit by rising fuel costs.

And here, there are some very interesting trends.

For example, almost every state considered a solid lock for Obama has gas prices above the national average. Most solid red states pay less than the national average. And swing states are somewhere in the middle.

Check out the chart below, produced by Trevor Houser of Rhodium Group, for all the color-coordinated details:

But Republicans shouldn't get too excited about this, because as Houser points out, the chart looks very different when you take into account gasoline consumption, which tends to be higher in rural areas with long commutes and fewer public transit options.

And each dollar spent on gasoline is a dollar not spent elsewhere in the economy.

Calculated this way, the picture inverts, but the purple swing states are clustered roughly in the middle.

Some battleground states are in better shape than others. Florida, Ohio, Michigan, North Carolina, Wisconsin, Iowa, New Mexico and New Hampshire all pay more as a share of personal income on gasoline than the national average. That's 103 electoral votes.

Pennsylvania, Virginia, Colorado and Nevada -- with 48 electoral votes -- are all below the average.

Join the Conversation
About This Author
Charles Riley
Charles Riley
Reporter, CNNMoney

Charles Riley lives and works in Hong Kong, where he covers markets, economics and other high-impact stories across Asia. He previously worked for CNNMoney in New York and CNN in Washington. He tweets @CRrileyCNN

Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 96 other followers