In Elections, Jobless Trend Matters More Than Rate

Barack Obama re-election umemployment By Paul Wiseman

WASHINGTON (AP) -- Unemployment is higher than it's been going into any election year since World War II.

But history shows that won't necessarily stop President Barack Obama from reclaiming the White House.

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In a presidential election year, the unemployment trend can be more important to an incumbent's chances than the unemployment rate.

Going back to 1956 no incumbent president has lost when unemployment fell over the two years leading up to the election. And none has won when it rose.

The picture is similar in the 12 months before presidential elections: Only one of nine incumbent presidents (Gerald Ford in 1976) lost when unemployment fell over that year, and only one (Dwight Eisenhower in 1956) was re-elected when it rose.

Those precedents bode well for Obama. Unemployment was 9.8 percent in November 2010, two years before voters decide whether Obama gets to stay in the White House. It was down to 8.7 percent in November 2011, a year before the vote. It fell to 8.5 percent in December and is expected to fall further by Election Day.

Even so, the unemployment rate is still at recession levels. And former Massachusetts Gov. Mitt Romney, who is contending with other Republican candidates to challenge Obama in November, has made the weak economy the centerpiece of his campaign.

In a statement Friday, Romney said Obama's policies "have slowed the recovery and created misery for 24 million Americans who are unemployed, or stuck in part-time jobs when what they really want is full-time work."

An Associated Press-GfK poll of American adults last month found that 60 percent of American adults disapprove of Obama's performance on economic issues.

Obama can take comfort in President Ronald Reagan's experience. In November 1982, the economy was in the last month of a deep recession, and unemployment was 10.8 percent, the highest since the Great Depression. A year later, unemployment was down to 8.5 percent. By November 1984, it was still a relatively high 7.2 percent, but the downward trend was unmistakable. Reagan was re-elected that month in a 59-41 percent landslide.

"A sense that things are on the mend is really important to people," says Andrew Kohut, president of the Pew Research Center. Three examples:

President Richard Nixon got a boost from falling unemployment, which dropped from 5.9 percent in November 1970 to 5.3 percent when voters went to the polls in November 1972.

President Jimmy Carter was hurt by rising unemployment - from 5.9 percent in November 1978 to 7.5 percent in November 1980.

President George H.W. Bush, who seemed invincible after the U.S. drove Saddam Hussein's Iraqi forces out of Kuwait in early 1991, wound up losing in November 1992. The unemployment rate was 7.4 percent that month, up from 6.2 percent two years earlier.

The trend holds up even when the changes in unemployment are slight. President Bill Clinton was re-elected handily even though the unemployment rate was only 0.2 percentage points lower in November 1996 than it had been two years earlier and was the same as it had been a year before.

Under Obama, unemployment peaked at 10 percent in October 2009, nine months into his presidency, before it began coming down in fits and starts. Along the way it stayed above 9 percent for 21 straight months.

But unemployment has now dropped four months in a row. And the economy added 1.6 million jobs in 2011, the most since 2006.

Of course, unemployment isn't everything.

Obama's prospects could be changed by the strengths or weaknesses of whoever emerges as his Republican opponent or by a triumph or setback in foreign policy, perhaps in Afghanistan or the Middle East.

Eisenhower no doubt benefited from having an opponent, the high-brow former Illinois Gov. Adlai Stevenson, who had trouble connecting with ordinary voters. Ford may have been sunk by his unpopular decision to pardon former President Nixon. President Jimmy Carter's prospects were surely dimmed by the lengthy hostage crisis in Iran - and a failed attempt to end it with a military rescue.

The third-party candidacy of billionaire Ross Perot - not just an increase in unemployment - may have torpedoed President George H.W. Bush's re-election campaign in 1992 by dividing his supporters and giving an edge to challenger Clinton.

And there's no guarantee that unemployment will continue to slide through Election Day. "We've seen this before ... periods when it seemed like things were getting better only to see them grind to a halt," says John Challenger, CEO of the staffing company Challenger, Gray & Christmas. "I'm not yet convinced."

Americans who have given up looking for work don't count as unemployed in the official tally. But if they get more optimistic, they might re-enter the job market and join the ranks of the officially unemployed, pushing the rate back up, says Republican strategist Rich Galen.

Galen says what matters is how the economy looks in late summer when undecided voters start making up their minds. "What people perceive in August is what they take to the polls with them."

Three dozen economists surveyed by The Associated Press in December see an 18 percent chance that Europe's debt crisis will cause the U.S. economy to slip back into recession. If 2012 brings a recession, Obama would surely lose, writes Yale University's Ray Fair, who feeds economic forecasts into a computer model to predict elections.

Pew's Kohut also warns that voters are wary after seeing the economy fail to achieve liftoff two and a half years after the Great Recession officially ended in June 2009. "The public is going to be in a show-me mood," he says.

Still, the online betting market Intrade on Friday put the chances of an Obama victory in November at 52.5 percent.

Next:U.S. Unemployment Rate Falls As Economy Adds 200,000 Jobs