Weak economy seen buoying Democrats

By Andrea Hopkins - Analysis

CINCINNATI (Reuters) - Gasoline prices may have declined a bit, but economic gloom among voters is not expected to lift before the November presidential election -- hindering Republican chances to hold on to the White House.

Fresh data showing sharply higher inflation and the slowest start rate in home building in more than 17 years highlighted economic woes on Tuesday, and analysts said there is little doubt the accumulation of bad news bolsters voter appetite for a change in Washington.

Although Democratic presidential candidate Barack Obama was seen as trailing Republican John McCain by 5 points in a Reuters-Zogby poll issued on Wednesday, analysts said if the economy declines further Obama was likely to benefit.

"To the extent that the economy gets worse, that will help Sen. Obama because people will view him as, in the well-worn phrase, the 'agent of change,'" said Michael Walden, an economics professor at North Carolina State University.

A bad economy is never good for political incumbents. After seven years under Republican President George W. Bush, voters are glum about the state of the U.S. economy, weary of high prices, rising unemployment and a housing and credit crisis.

"People are overwhelmingly saying that the economy is what matters this election," said Maurice Carroll, director of the Quinnipiac University Polling Institute.

The economy is the single most important issue for 52 percent of likely voters, according to a Quinnipiac national poll released on Tuesday, far outnumbering the 16 percent who are most concerned about the war in Iraq.

But it is not clear which candidate is viewed as the better economic manager. Polls have been mixed.

The Reuters/Zogby poll released on Wednesday showed McCain has a 9-point edge, 49 percent to 40 percent, over Obama on the question of who would be the best manager of the economy. Quinnipiac's Tuesday poll showed nearly the opposite.

The faltering economy had been expected to be a weakness for McCain, an Arizona senator and former Vietnam prisoner of war who has admitted a lack of economic expertise.

But McCain has been on the offensive against Obama during the last month over energy concerns, with polls showing strong majorities supporting his call for an expansion of offshore oil drilling as gasoline prices hover near $4 a gallon.

Obama had opposed new offshore drilling, but said recently he would support a limited expansion as part of a comprehensive energy program.

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Brian Darling, an economic and political analyst at the conservative Heritage Foundation, said McCain's push for more domestic energy production is winning voters.

"You look at poll numbers and McCain is hanging tough under very difficult economic circumstances," said Darling.  Continued...