As Mitt Romney, Rick Santorum and the cadre of Republican primary hopefuls traversed the early-voting states of Iowa and New Hampshire in mid-January, President Barack Obama’s team in the White House sweated over the state of unemployment.
Whilst the economic recovery had begun to take hold (as reflected in improved GDP figures), the unemployment rate had not appreciably fallen over the course of Obama’s term, stubbornly stuck (for the Obama White House and the American worker), above 9% for the bulk of 2010 and flat-lining in the mid 8’s as debt and deficit reduction under the new Republican House majority dominated the conversation in 2011.
However, when the Labor Department announced that American unemployment had dropped 0.2% over January, a gain of 243,000 jobs, the conventional wisdom of a President burdened by the millstone of pervasive and deep-seated unemployment began to dissipate.
Whilst no President since Franklin Roosevelt has won re-election with an unemployment rate stuck above 8%, the general consensus is that an Obama re-election is more than a 50/50 chance, provided the monthly change in added jobs continues to remain in the vicinity of 250,000.
As Nate Silver in The New York Times noted, President Ronald Reagan won re-election in 1984 with unemployment at 7.4%, after plummeting from 9.5% the year before.
Such is Obama’s challenge; whilst the numbers are not ideal presently, if the economy can give the impression of making significant, steady gains in employment over the next 8 months, the perception for the American voter will be one of an American comeback; and with that would come a likely re-election of the President.
Whether this period is looked back on as the moment when Obama’s re-election went from being potentially hazardous to a near certainty depends on the trend of the unemployment rate for the rest of 2012.
The biggest factor in determining this trend will be whether the long-term unemployed, currently out of the labour force, decide to re-enter the market and look for a job in an atmosphere of improved hiring conditions; thus placing upward pressure on the unemployment rate.
This dynamic coupled with the impending cuts in the federal budget and the unemployment rates in various swing states could be the difference for this President as he seeks to secure a successful legacy, entirely predicated on his re-election.