Unemployment and Presidential Elections

Article excerpt


With overwhelming majorities of voters and other survey respondents telling pollsters that the economy is the most important issue during the 2008 election year, the unemployment rate, as it has in comparable periods, will play a major role in the presidential election. As history has demonstrated, not only will the level of the unemployment rate be a major factor; so, too, will its trend.

The April unemployment rate was 5 percent, which is relatively low by historical standards. Indeed, the current unemployment rate is comfortably below the average unemployment rates for the 1970s (6.2 percent), the 1980s (7.3 percent) and the 1990s (5.75 percent). The April unemployment rate of 5 percent is the same as the 2000-07 average rate.

The April unemployment rate is also near or below prevailing unemployment rates in November of many presidential-election years. The November unemployment rates for elections since 1960 were as follows: 6.1 percent (1960), a recession year when John F. Kennedy defeated two-term Vice President Richard Nixon; 4.8 percent (1964), when President Lyndon Johnson won a full term after completing Kennedy's first term; 3.4 percent (1968), when Nixon defeated then-Vice President Hubert Humphrey; 5.3 percent (1972), when Nixon won a second term in a landslide over George McGovern; 7.8 percent (1976), when Jimmy Carter defeated incumbent Republican President Gerald Ford, who replaced Nixon after he resigned; 7.5 percent (1980), a recession year when Ronald Reagan defeated Mr. Carter; 7.2 percent (1984), when Reagan won re-election in a landslide over Walter Mondale; 5.3 percent (1988), when then-Vice President George H.W. Bush succeeded Reagan by beating Michael Dukakis; 7.4 percent (1992), when Bill Clinton defeated incumbent Bush; 5.4 percent (1996), when Mr. Clinton won re-election by beating Bob Dole; 3.9 percent (2000), when George W. Bush defeated then-Vice President Al Gore; 5.4 percent (2004), when President Bush won re-election by beating John Kerry.

According to the preceding review of the last 12 presidential elections, today's unemployment rate of 5 percent is lower than nine and higher than three (1964, 1968 and 2000). Interestingly, the party out of power won the White House in 1968 and 2000 when the unemployment rate (3.4 percent in 1968 and 3.9 percent in 2000) was well below today's rate of 5 percent. What is especially striking about the prevailing unemployment rate for the 2000 election (3.9 percent) is the fact that Mr. Gore failed to retain the White House for the Democratic Party despite the fact that the unemployment rate (and, for that matter, the budget balance as well) improved for eight consecutive years during the Clinton-Gore administration. …