Every election cycle, presidential candidates' advertisements promise jobs, growth, and lower prices — as if the president had a special lever labeled “economy.” But how much say does the president have over the economy? A study found that 52% of voters have labeled the economy as extremely important and 38% as very important when deciding who to cast their vote for. To understand where presidential influence begins and ends, we need to separate perception from reality.
Presidents are often credited or blamed for every shift in economic activity. It has been calculated that for every 1% growth in GDP, there will be a 1.2% growth in the incumbents ' party's vote share. However, many of the short-run economic fluctuations are inherited from past administrations, and growth patterns and supply shocks may only become apparent years after they occur, making it seem as though the current president is responsible. For example, after the COVID-19 pandemic, the Biden administration saw massive job gains; however, this was mostly due to the natural post-pandemic recovery.
So if presidents are not the main driver of the economy, what is? The Federal Reserve, or FED, controls much of the economic activity through the manipulation of interest rates through monetary policy. The FED has a goal of maintaining maximum employment and a long-run level of 2% inflation. The Federal Reserve's control of interest rates in the economy has a direct impact on consumer spending, interest rates, and job growth. Presidents through Congress can propose fiscal packages that may affect the economy, but they often have large time lags, which delay their effect.
However, presidents also possess other abilities that are correlated with the state of economic activity. Presidents have the power to set the fiscal tone, like tax reforms, infrastructure spending, and trade policy. The president can also control regulatory policies that dictate economic growth. Immigration policies set by the president can also impact the state of the economy by regulating the workforce at a given time. Finally, a president's public statements can also influence financial markets through consumer confidence.
All in all, presidents can campaign that they will “fix the economy” all they want, but the truth is that the health of the economy is a much more complex issue.
For a president, the economy is more like a ship that they can nudge in the right direction, which is often forgotten by voters.















Works Cited
BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM. “The Fed - What Economic Goals Does the Federal Reserve Seek to Achieve through Its Monetary Policy?” Board of Governors of the Federal Reserve System, 27 Aug. 2020, www.federalreserve.gov/faqs/what-economic-goals-does-federal-reserve-seek-to-achieve-through-monetary-policy.htm.
Brenan, Megan. “Economy Most Important Issue to 2024 Presidential Vote.” Gallup, Gallup, 9 Oct. 2024, news.gallup.com/poll/651719/economy-important-issue-2024-presidential-vote.aspx.
Myers, Jeffrey, and Louise Travers. The Impact of the Economy on Presidential Elections throughout US History. 2021.