The US presidential election is 80 days away. The candidates of the two main political parties were named at their respective national conventions in mid-July: Hillary Clinton for the Democratic Party and Donald Trump for the Republican Party. A look at their electoral platforms will help us compare the potential impact of their proposals on the US economy, interest-rate markets and stock markets.
Hillary Clinton is currently leading Donald Trump in the polls. The gap between the two candidates – who are the least popular candidates in US history – widened in August: polls and prediction markets give Mrs Clinton an 8.3% and 60% edge, respectively (see charts below). But the tables could turn: Mr Trump could still make a popular comeback before 8 November, and the Brexit experience shows that polls are not always accurate. But pollsters say that it is more difficult to predict the outcome of a one-off like Brexit than presidential elections, which come with more than 65 years of polling history. The Princeton Election Consortium notes that the margin of error in polls is only +/- 4.5% (65 days before the election), which is less than the lead currently projected for Mrs Clinton. But these historical data should be taken with a grain of salt given Mr Trump’s ability to defy the odds when it comes to expected voter behaviour.
The election will take place at a time when unemployment is low, consumer spending is high and wages are increasing at a pace of 2.6% year on year. At the same time, the labour-force participation rate is only 62.8%, and inequalities have worsened since the financial crisis. This is why this election season has been less about economic growth per se and more about the beneficiaries of economic growth, with growing opposition to free-trade agreements in order to bring manufacturing jobs back onshore, and calls for a more equitable tax system. While the Democratic Party has historically been aligned with this sort of income distribution, it is a first for the Republican Party. The second sentence in Mr Trump’s speech to the Detroit Economic Club on 8 August is telling: "It’s a conversation about how to Make America Great Again for everyone, and especially those who have the very least."