By Nate Silver | 06.02.2011%0D %0D Make no mistake: The higher the unemployment rate in November 2012, the less likely President Obama is to win a second term.%0D %0D But we should be careful about asserting that there is any particular threshold at which Mr. Obama would go from favorite to underdog, or any magic number at which his re-election would either become impossible or a fait accompli. Historically, the relationship between the unemployment rate and a president%E2%80%99s performance at the next election is complicated and tenuous.%0D %0D An article in today's [italic]Times[/italic] notes, for example, that "no American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent." The 7.2 percent figure refers to Ronald Reagan, who resoundingly won a second term when the unemployment rate was at that number in November 1984.%0D %0D This type of data may be of limited utility for predictive purposes, however. Reagan won re-election by 18 points in 1984, suggesting that he had quite a bit of slack. An unemployment rate of 7.5 percent would presumably have been good enough to win him another term, as might have one of 8.0 percent, 8.5 percent or even higher.%0D %0D It%E2%80%99s also not obvious that Roosevelt should be excluded from the calculus, particularly given that the economic crisis the country is working its way out of is the most severe since his administration. He won re-election in 1936 with an unemployment rate of 16.6 percent, and again in 1940 with a rate of 14.6 percent. %0D %0D For Roosevelt, at least, the unemployment rate was headed in the right direction: down from 19.8 percent in 1933, the year that he took office. This was also true for Reagan, although only barely so: the unemployment rate of 7.2 percent that he faced in November 1984 was slightly lower than the 7.5 percent rate he inherited from Jimmy Carter.%0D %0D The unemployment rate when Mr. Obama took office was 7.8 percent -- and he may not follow in his predecessors%E2%80%99 footsteps by leaving it in a better place than he found it. As of last month, private forecasters like Wells Fargo and the [italic]Wall Street Journal[/italic] forecasting panel were anticipating an unemployment rate very close to 7.8 percent by late 2012. But those forecasts preceded a bevy of poor economic reports, which may encourage some economists to lower their estimates.%0D %0D Looking at unemployment in this way -- as the rate of change over a president's term -- is probably the more worthwhile approach. But it too is not always reliable. Unemployment increased by 1.9 percentage points over the course of Richard Nixon%E2%80%99s first term, but he won re-election overwhelmingly. It also increased during George W. Bush's and Dwight D. Eisenhower%E2%80%99s first terms, and their re-election bids were also successful. The unemployment rate fell to 3.9 percent from 5.3 percent, meanwhile, during Bill Clinton's second term -- but his Vice President, Al Gore, could not beat Mr. Bush in the Electoral College.%0D %0D There are also cases in which the data behaved more intuitively: Gerald Ford, Jimmy Carter and George H.W. Bush all faced high unemployment rates when they lost their re-election bids, and that was surely a factor in their defeats. But historically, the correlation between the unemployment rate and a president's performance at the next election has been essentially zero.%0D %0D In the chart below, I've provided unemployment data for the past century%E2%80%99s worth of presidential elections, comparing the unemployment rate on Inauguration Day to the that one the president (or the incumbent party's candidate) faced on Election Day. Data for 1948 onward is taken on a monthly basis, while annual estimates only are available prior to that date.%0D %0D
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