Friday, October 05, 2012

Time to trot out my 16-month unemployment movement rule

In June 2011, when the Times' Binyamin Appelbaum warned that no president since Roosevelt has won reelection with the unemployment rate above 7.2%, I cobbled together a "16 month rule" for the zone in which the unemployment rate might more or less directly affect elections:
I have for some time been (nervously) tracking Obama's political fortunes against Reagan's, since it's often pointed out that both inherited a vicious recession; at Obama's low moments I've taken some comfort in the fact that Reagan's approval rating reached a nadir of 35% in January 1983, shortly after the unemployment rate peaked at 10.8%.  The impression I've soaked up is that the unemployment rate really matters in the 16-odd months before a president stands for re-election, when the electorate starts to tune in and measure him against the opposing party's candidates.  For Reagan, I've noted, a decisive turn came in July 1983, when the unemployment rate dipped to 9.4% from 10.1% the prior month. From there he had the wind at his back to October 1984, when the rate was 7.4%. Hence Reagan's landslide.  He asked us to stay the course, and the course started running downhill run when it counted.

Might it be postulated that the direction in which employment moves in the 16 months prior to an incumbent president's reelection bid is a fair predictor of his political fortunes?  The postulate works for six of the seven incumbents since Nixon, the earliest president for whom I have monthly unemployment numbers....

Here are the figures for each incumbent, with the one exception to the 'rule' highlighted:

Nixon:    July 1971 - 6.0%; Oct 1972 - 5.3%
Ford:      July 1975 - 8.6%; Oct 1976 - 7.7%
Carter;   July 1979 - 5.7%; Oct 1980 - 7.5%
Reagan:  July 1983 - 9.4%; Oct 1984 - 7.4%
Bush Sr: July 1991 - 6.8%; Oct 1992 - 7.3%
Clinton:  July 1995 - 5.7%; Oct 1996 - 5.2%
Bush Jr: July  2003 - 6.2%; Oct 2004 - 5.5%
So let's provisionally add Obama to the tabulation: 
Obama: July 2011 - 9.1%; Sept 2012 - 7.8%
I like the look of that.  The movement presumably needs to be larger when the starting rate is high, and in fact Obama's movement is closer to Ford's than Reagan's. But Ford was pushing against the huge headwind of Nixon's disgrace, whereas Obama is still somewhat buoyed by people blaming Bush more than him for continued tough economic times.

p.s. July in the year prior is obviously an arbitrary cutoff, and in retrospect I don't know why I cut a large bloom off the Reagan surge by not starting in June, since the rate plunged .7% from June-July.  But I do think broadly speaking that considering the rate over the course of our very long election process probably makes sense.

p.p.s. To reiterate a question I posed in Feb. 2012: I wonder, too, how the unemployment rate and other key economic measures register with voters. Is the overall perception of how the economy is doing the sum total of people's personal impressions, based on their own fortunes and those of people they know?  Do the top-line numbers reported each month filter into general consciousness, either as news points or as shapers of the perceptions of opinion shapers? Some combination of all of the above?

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