With less than six weeks to the election, President Obama is benefiting from a curious paradox. Although the economy remains weak by most indicators, consumer optimism has registered a distinct, though modest, gain. The stock market is up, as are the three main confidence surveys — from Gallup, the University of Michigan and the Conference Board. The contrast suggests some possible explanations: (a) the economic indicators are backward-looking and the economy is stronger than the numbers suggest; or (b) something else — the political conventions, gasoline prices, the Federal Reserve’s latest credit easing — has made people slightly more optimistic.
Either way, it’s good news for the president. The rise in consumer optimism has coincided with gains in his approval rating and a widening of his lead over Mitt Romney in most opinion polls. Of course, there’s no assurance that either will last. If September’s unemployment figures, scheduled for release Oct. 5, are poor, economic sentiment — and the president’s prospects — could reverse.