“It’s the Economy, Stupid”, is a phrase coined by James Carville in 1992.  At the time, Carville was a strategist for the Bill Clinton political campaign against then-incumbent President George H. W. Bush. The phrase still holds up today and may be the key factor determining who wins this year’s presidential election. The table below, from BCA Research, highlights that historically, the incumbent party holds a big advantage in presidential elections. However, the state of the economy plays a big role in determining the winner. In election years, the incumbent party has won the presidential election 80% of the time if the economy avoids a recession. In election years that experience a recession, the incumbent president’s win rate drops to 44%. If you are looking for clues on who will win this year’s presidential election, keep a close eye on the economy!