In the last 60 years there have been eight incumbent presidents seeking re-election. The table below shows the unemployment rate in January of the first year of their term, and then in January, July, and October of the last year of their first term.

As the White House squabbles over a hundredth of a percent in the latest labor statistics we asked ourselves: Why is this nit worth picking?

Here are just a few facts that help understand what 8.3{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222} unemployment means historically and from the Obama re-election campaign’s point of view:

1. This administration is in uncharted territory when it comes to unemployment. In the last 60 years, no incumbent has faced unemployment over 8.0{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222} in his re-election year. Only in January 1984 did unemployment hit 8.0{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222}, but the rate steadily dropped throughout that year and Reagan went on to win re-election in a landslide. In all of 2012 however, unemployment has not dipped below that historic high-water mark.
2. As the table shows, incumbents have been re-elected despite an overall increase in the unemployment rate over their first term. Therefore, when it comes to unemployment, the question is not “are we better off today than we were four years ago.”  Instead the question is, “What have you done for me lately?” with January of the election year being a benchmark for that measure.
3. Using January of the election year as a benchmark, over the past 60 years there is a consistent trend: Incumbents are defeated when the unemployment rate over the final ten months of their term increases (1980 Jimmy Carter) or remains flat (1992 George H. W. Bush).
4. In seven of the past eight election years where an incumbent is vying for a second term the unemployment rate has dropped or remained steady between July and October .*  As we can see in the table a drop in the final four months does not correlate with re-election.  But this year is again unlike any other in that the January and July unemployment rates are both 8.3{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222}.  In mid-July Fed Chair Ben Bernanke warned that progress in reducing an 8.2{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222} unemployment rate “seems likely to be frustratingly slow,” now the rate has risen and is effectively flat for 2012.

Bottom line

With the most recent unemployment report, the Obama economy has returned to its January benchmark of 8.3{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222} unemployment. Predictions for the next several months portend a sluggish economy. History suggests that if unemployment stays at 8.3{09f965da52dc6ab4c1643a77bd40d1f729d807040cd8db540234bb981a782222} or increases any more in October – Obama will not be re-elected.

*Only in 1964 did the unemployment rate grow from July to October in an election year with an incumbent running for re-election.