By Ben White, Politico.com, February 9th, 2011:
…White House advisers know that an unemployment rate above 8 percent in November 2012 probably spells doom.
History bears out that fear, and the dreaded number is actually closer to 7 percent.
According to a recent study by Matt McDonald of Hamilton Place Strategies, there have been four presidential elections since 1960 in which the unemployment rate was above 7 percent: 1976, 1980, 1984 and 1992. In three of these four elections, the incumbent party lost. Ronald Reagan won in 1984, at a time of 7.2 percent unemployment.
To get below 8 percent, the economy has to create about 215,000 jobs per month by Election Day 2012, according to McDonald, which seems highly unlikely. Still, the trend matters.
Reagan won in 1984 in part because unemployment, while still high, had dropped 1.3 percentage points in the year before the election.
So even if Obama cannot get below 8 percent, he could still win. The president “would see an improved political position from a significant drop in the unemployment rate,” McDonald said.
“Current economic forecasting projects a fourth-quarter 2012 unemployment rate of approximately 8 percent,” he added. “If the unemployment rate can break this 8 percent level, President Obama can credibly argue that he is making progress on jobs, even though the unemployment rate will still be historically high.”