Is The Economy Actually Improving?

While what may have been the final Republican debate revolved around contraception, same-sex marriage, religious freedom and earmarks, 2012 is still poised to be an election about the economy. Several indicators show signs of a recovery that could boost President Obama: unemployment is down, the dollar's value is rising, and consumer prices have stopped climbing. But when it comes to how people vote, the better question may be, how do they feel about the economy?Pretty positively, it turns out, according to the Election Oracle—which helps explain why Obama has consistently stayed in good favor online of late. The Web conversation about the economy looks a bit like a third grader's scribble, up and down day to day with the latest news. On Wednesday, the economy's favorability score was 29; Tuesday it had been in negative territory. But smooth the line and online talk about the economy has tended to be more positive than negative so far this year. A series of positive headlines lately might explain why: foreclosures have slowed, private sector job growth has continued and the White House announced earlier this month that banks that padded their pockets by predatory lending would have to cough up billions in restitution.

To determine favorability ratings, the Election Oracle tracks 40,000 news sites, blogs, message boards, Twitter feeds, and other social-media sources to analyze what millions of people are saying about the issues and candidates—and determines whether the Web buzz is positive or negative. That rating is weighted, along with the Real Clear Politics polling average and the latest InTrade market data, to calculate each candidate’s chances of winning the Republican nomination. (See methodology here.)

But just last summer, Obama was faced with a damaged job market that and a steep climb toward reelection – and campaign officials fret that this summer could be as difficult as rising gas prices and energy costs set in just as the season of heightened travel begins. And of course conflict with Iran, or more economic fallout from Europe’s slow-motion meltdown could change the conversation dramatically. But while the Obama White House tries to do what it can to improve the numbers, his campaign is trying to make the argument that the economy actually feels like it's in better shape now that the recovery has begun. And based on the Web's reaction, the sales pitch has been pretty persuasive.

Find the Election Oracle at oracle@newsweekdailybeast.com or on Twitter at @ElectionOracle.