Presidents and the Stock Market : Annualized % Change in the S&P 500 by President and Party
Anyone who says that Democratic administrations are worse for the stock market or the economy than Republican ones has not actually crunched the numbers. I have.
Since 1901, the S&P 500** has climbed 9.87% per year on average* when the president had a D after his name. This is over 2.5 times the average gain of 3.92% when the president was Republican.
Only 5 presidents left office with the S&P 500 lower than when they were inaugurated - 4 were Republican.
6 out of the bottom 8 presidents by stock market gains or losses during their administrations were Republican.
President Obama's first term saw a 16.05% annualized rise in the S&P 500, greater than any president since John F. Kennedy. He statistically tied with Eisenhower. You have to go back to Calvin Coolidge to find anyone who came close to this stock market rise.
Some surprises
Who knew that the market - on an annualized basis - performed so well during the short presidencies of John F. Kennedy (D) and Ford (R) , neither of whom is remembered as particularly business friendly. Ford's record benefited from the economic and political disasters of the Nixon administration; John F. Kennedy's time in office was so tragically short small changes either way in the index could have led to a disproportionate swing when annualized.
Despite the contempt Republicans shower on President Carter, the market gained a not-too-shabby 6.17% per year, almost the mirror image of Bush II's (R) 6.07% annualized loss.
Why does it matter?
Perhaps it doesn't, but the Republicans always tell us it does. They claim to be the party of business and although there are many economic variables one could measure, the stock market is one of the best leading economic indicators out there, discounting all other publicly available data. Although subject to short term overvaluations and panic selling, over a very long period (112 years here), those fluctuations should average out (unless people are more likely to panic under Republican administrations, which undermines their claim of removing business uncertainty and inspiring "morning in America" economic growth).
* geometric average as defined by (ending index level / starting index level) 1/years in office - 1
** I used Shiller's long term data series going back to 1870 as well as Yahoo, and used the month end closes only both for simplicity's sake and to reflect the fact that a president inaugurated March 4, let's say, cannot conceivably do anything meaningful to affect the economy until at least the end of the month - a fairer study would lag the data 6 months
Anyone who says that Democratic administrations are worse for the stock market or the economy than Republican ones has not actually crunched the numbers. I have.
Since 1901, the S&P 500** has climbed 9.87% per year on average* when the president had a D after his name. This is over 2.5 times the average gain of 3.92% when the president was Republican.
Only 5 presidents left office with the S&P 500 lower than when they were inaugurated - 4 were Republican.
6 out of the bottom 8 presidents by stock market gains or losses during their administrations were Republican.
President Obama's first term saw a 16.05% annualized rise in the S&P 500, greater than any president since John F. Kennedy. He statistically tied with Eisenhower. You have to go back to Calvin Coolidge to find anyone who came close to this stock market rise.
Some surprises
Who knew that the market - on an annualized basis - performed so well during the short presidencies of John F. Kennedy (D) and Ford (R) , neither of whom is remembered as particularly business friendly. Ford's record benefited from the economic and political disasters of the Nixon administration; John F. Kennedy's time in office was so tragically short small changes either way in the index could have led to a disproportionate swing when annualized.
Despite the contempt Republicans shower on President Carter, the market gained a not-too-shabby 6.17% per year, almost the mirror image of Bush II's (R) 6.07% annualized loss.
Why does it matter?
Perhaps it doesn't, but the Republicans always tell us it does. They claim to be the party of business and although there are many economic variables one could measure, the stock market is one of the best leading economic indicators out there, discounting all other publicly available data. Although subject to short term overvaluations and panic selling, over a very long period (112 years here), those fluctuations should average out (unless people are more likely to panic under Republican administrations, which undermines their claim of removing business uncertainty and inspiring "morning in America" economic growth).
* geometric average as defined by (ending index level / starting index level) 1/years in office - 1
** I used Shiller's long term data series going back to 1870 as well as Yahoo, and used the month end closes only both for simplicity's sake and to reflect the fact that a president inaugurated March 4, let's say, cannot conceivably do anything meaningful to affect the economy until at least the end of the month - a fairer study would lag the data 6 months
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