In his reelection campaign in 1984, Ronald Reagan posed the question, "Are you better off than you were four years ago?" Interestingly, in the planning for the 2004 presidential race, those of us involved in Bush's reelection campaign looked at this question and concluded that what mattered was not whether voters thought they were better off, but whether they thought their community or country was better off. People would set aside their own financial condition if they felt their community as a whole was improving. That's a distinction unfortunately lost on some candidates who appeal only to voters' self-interest.
As I have noted before, it's not particularly instructive to compare Obama's situation now with Bill Clinton's at the same point in his presidency, since the economy was improving on a month-to-month basis from the moment Clinton took office through his reelection. Reagan, whose party suffered big losses in the 1982 midterms because of the economy, is a much more apt comparison.
Under Reagan, however, the economy began to dramatically improve in January 1983--the comparable point in time to now for Obama. By the fall of 1984, the unemployment rate had dropped 3 full percentage points. Obama probably will not require this dramatic an improvement to assure his reelection, but he is going to need the unemployment rate to drop at least a point and a half. To do this over the next 18 months, the economy will need to add an average of 250,000 jobs a month. (The White House got some good news on Wednesday, when the ADP National Employment Report said that 297,000 private-sector jobs were added in December. Official government numbers will be released on January 7.) That means this administration will need to add more than 4 million jobs to get the unemployment rate back to where it was when Obama took the oath of office. Even if the economy were to add 2 million jobs in the next 18 months, the unemployment rate would not budge because of the new folks added every month to the workforce.
Another consideration to keep in mind is where jobs are being created: Are they in key electoral states, or in safe Republican or Democratic states? If jobs are added in Texas and California, it won't help the president much because those are not swing states in a reelection battle. In 1984, jobs were added across the board in nearly every jurisdiction, so Reagan did not have worry about this problem.
For Obama, the key will be the unemployment situation in the industrial states of Michigan, Ohio, Pennsylvania, and Wisconsin. To be reelected, Obama will need to carry at least three of those four states, which are all suffering badly. In November, voters in each of these states elected Republican governors to replace Democrats. Republicans also picked up congressional seats and state legislative seats across this section of the country. So watch the overall national job-creation numbers, but keep a close eye on these four key states.