The surge is particularly evident in a number of swing states. For example, Florida has flipped to a slight Romney edge in the ElectionMarkets pricing model. And the gap has narrowed significantly in other swing states. (See table below.)
The momentum did not appear to be halted by the convenient news that the unemployment rate had dropped to 7.8% In September. It remains to be seen what if any impact this news will have on the Romney momentum.
Perhaps the timing leaves the public skeptical. Or perhaps the broader measure remaining at 14.7% informs the public that any improvement is small.
Of course if the labor force participation rate had not declined since Obama's inauguration in January 2009, the unemployment rate would be 10.7%. And the employment population ratio has only increased
by 0.5 percentage point from its cycle low.
Romney has picked up ten electoral votes in the macro based ElectionMarkets model and 20 electoral votes in the state based micro simulation model (table below). The macro version has Romney at 228 electoral votes, while the micro simulation puts his total at 245.
It will be interesting to see if this surge continues over the next week. If the Obama campaign does not stem the tide, the markets may reevaluate their current judgement that the President is still the favorite.
Democrats remain the favorite in the race to control the Senate albeit a narrow one. The ElectionMarkets state based model presently estimates Republicans capturing 49 seats.
The model is somewhat sensitive to changes at the Presidential level.
It would not take much movement to shift market perceptions toward the GOP. The model suggest that the seats that observers should watch closely include: Arizona, Connecticut, Massachusetts, Montana, Virginia, and Wisconsin.
The seats where Republicans can benefit most from continuing growth in enthusiasm for the Presidential ticket are Arizona, Montana, Virginia, Wisconsin.
Markets have not yet bought fully into Linda McMahon's strong campaign, but they are beginning to notice.
I have a bad feeling that Obama is going to win. Romney stepped on his grassroots conservative base at the GOP convention when his establishment cronies took that phony voice vote on the floor which ilegally implemented Rule 12. Romney will definitely edge out with independents. But a large portion of the conservative base may sit this election out.
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