The second-quarter GDP report and the 2010 midterms

July 30, 2010

The uninspiring 2Q GDP report of 2.4 percent is now the new relevant data point, not the Zandi-Blinder study.

Politically,  the issue is not whether the U.S. economy will slip into a double-dip recession — though it is hardly out of the question for a negative GDP quarter to pop up this year.  It’s how the economy will impact voter mood in 100 days. Will they think America is back on track toward prosperity with growth below trend and unemployment hovering around double digits? That seems unlikely to me. And given that, this Cook Political Report forecast certainly seems realistic, if not a bit cautious:

The Cook Political Report’s current outlook is for a 32 to 42 seat net gain for Republicans. Currently there are 255 Democratic and 178 Republican House members and two vacant seats, one formerly held by a Democrat and one by a Republican. Republicans need to net 39 seats to reach a bare majority of 218 seats. … The Cook Political Report’s current outlook is for a 5 to 7 seat net gain for Republicans. Currently there are 57 Democrats, two independents that caucus with Democrats, and 41 Republican Senators.

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There will be no double-dip because there has been no genuine recovery. Remove stimulus = remove growth = no sign of trade-gap getting anything but wider. If the US saw a consumer boom now, it would cost the Fed a fortune in further borrowing.

There will be a slip away from Obama, because Obama has not moved any closer to the American people.

There will be a Republican President in 2014….IF the GOP’s more prominent members decide to get house-trained in the meantime….and IF their natural franchise of support learns some ethics…. group-buying-your-own-kind-of.html

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