NEW YORK (TheStreet) -- The 2016 U.S. presidential election still goes to the Democrats, but the margin of victory is tightening, according to the latest update of the Moody's Analytics economy-based presidential election model.

The prediction model has been updated with data through the September forecast cycle, and the overall results remain unchanged from August's projection of a Democratic Party win, though the pendulum in key swing states has started to swing back in the direction of the challengers. The economic data underlying the model have weakened slightly, but not enough to push any of the swing states back into the Republican column. As a result, the model still predicts a win for whoever the Democratic nominee may be, by a margin of 326 to 212.

Political variables also turned, however slightly, against the Democrats this month as President Obama's approval rating edged down from the previous month's moving average. Sensitivity analysis on the model shows that a swing in the president's approval rating of as little as 3 percentage points, just within the margin of error for many presidential opinion polls, could be enough to move several swing states to Republicans if not balanced by an uptick in the economic data. Given the rampant uncertainty in federal fiscal policy and various geopolitical crises brewing overseas, a turn of that magnitude in the president's approval rating, in either direction, is well within the bounds of possibility.

Also encouraging for the challengers: new data, released since our state economic forecasts were finalized, have come in weaker than first expected. Personal income growth was reported by the Bureau of Economic Analysis to be below our forecast in the second quarter nationally, and significantly so in the key swing states of Ohio and Florida. The model currently shows both states going to the Democrats by margins of only 0.67% and 0.38%, respectively. Barring larger declines in gas prices, the electoral vote tally in the model will likely become much closer as these data are incorporated into our state economic forecasts next month.

The Moody's Analytics Presidential Election Model forecasts whether the incumbent party will maintain control over the White House using a mixture of economic, demographic and political data. The model successfully predicted every election back to 1980, including a perfect electoral vote prediction in the 2012 election.

Read Moody's Analytics Chief Economist Mark Zandi's explanation of the election model.

This article is commentary by an independent contributor. At the time of publication, the author held positions in the stocks mentioned.