- The Washington Times - Thursday, March 13, 2008

ANALYSIS/OPINION:

The employment numbers for recent months strongly suggest that presumptive Republican nominee John McCain and his congressional colleagues will face huge political problems this year.

Most worrisome is the fact that private-sector nonfarm employment fell by more than 100,000 jobs in February, a development that led many fence-sitting economists to finally predict that a recession was imminent, if one had not already begun. Indeed, noting that private-sector payroll employment had now suffered an average monthly decline of 47,000 jobs over the previous three months, Paul Ashworth, an economist at Capital Economics, told the New York Times that every time such a trend has occurred in the last 50 years, a recession inevitably resulted. Moreover, in all instances, the job market did not recover until after monthly job losses had exceeded 200,000.

During the past 50 years, whenever a recession occurred during a presidential-election year, the candidate of the political party occupying the White House lost. In 1960, for example, with the economy in the middle of an 11-month recession that began in April, then-Vice President Richard Nixon narrowly lost to Sen. John F. Kennedy. A six-month recession during the first half of 1980, which was accompanied by soaring prices, contributed to Ronald Reagan’s victory over President Jimmy Carter.

While an eight-month recession technically ended in March 1991, more than a year-and-a-half before the November 1992 election, the labor market never began to recover until just a few months before voters cast their ballots, dooming President George H.W. Bush’s chances for re-election. For most previous recessions, the unemployment rate peaked within a few months of the trough of the economic downturn. For example, the 1981-82 recession ended in November 1982, while the unemployment rate peaked at 10.8 percent during the last two months of that year. However, after the 1990-91 recession ended in March 1991, when the unemployment rate was 6.8 percent, the jobless rate continued to rise over the first 15 months of the ensuing expansion. By the time the unemployment rate peaked at 7.8 percent during the summer of 1992, Mr. Bush’s political fortunes were doomed in a campaign whose Democratic war cry was, “It’s the economy, stupid.”

During the 1976 presidential campaign, even though the previous recession had ended in March 1975 and the jobless rate had peaked in May 1975, the unemployment rate still remained stubbornly high. By Election Day 1976, the unemployment rate stood at 7.8 percent, having fallen only 1.2 percentage points from its cyclical peak of 9 percent. Moreover, the November 1976 jobless rate was 1.7 percentage points above the average rate (6.1 percent) that prevailed during the 16-month recession. The stubbornly high unemployment rate contributed to President Ford’s 1976 defeat by Mr. Carter.

If job losses continue this year and the unemployment rate inevitably begins to rise, Republicans will face unhappy voters who, if history is any guide, will blame the political party occupying the White House.

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