Today’s New York Times notes:
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.
With this in mind, the latest employment figures make grim reading for Barack Obama. After a week that has seen renewed talk of a double-dip recession, the US Department of Labor today announced that unemployment rose unexpectedly to 9.1 per cent, from 9 per cent a month earlier, with only 54,000 net new jobs added, well below the 150,000 that had been forecast. There’s now no chance of unemployment falling below 7.2 per cent before November 2012.
So, how worried should Obama be? It all depends on context. As Steve Benen notes at the Washington Monthly, FDR was able to win a second term because unemployment was falling, not rising. When Roosevelt ran for re-election in 1936, unemployment stood at 17 per cent but this was still down from 22 per cent in 1934 and 25 per cent in 1932. The public were satisfied because the figures were moving in the right direction. Similarly, as the NYT points out: “Ronald Reagan won, despite 7.2 percent unemployment in November 1984, because the rate was falling and voters decided he was fixing the problem.”
Thus, Obama’s challenge is to reduce unemployment to a level that voters, given the global economic context, are willing to tolerate. The Roosevelt precedent suggests that this could be significantly higher than 7.2 per cent.