Based off last Friday’s jobs report, Jonathan Chait thinks the answer to the title question might be “Yes:”

Defeating an incumbent president, historically, seems to require either a major scandal, a failed war, or a terrible economy. We have a terrible economy. But the direction seems to matter more than the level — Ronald Reagan famously cruised to reelection with a high unemployment rate because the economy bounced back from the deep but quick 1982 recession. Mitt Romney has made the state of the economy his central theme against Obama. The entire premise of his campaign is that the economy is bad because Obama's economic program has failed.

If voters think the economy is improving, Romney has no ammunition left. That is still the smart play for Romney, because if the economy feels strong, he probably can't win anyway, so he needs to plan for the scenario that gives him a chance to win. A few months ago, that scenario was looking almost certain. Now it's looking far less likely.

There is good reason to celebrate the addition of new jobs to the American economy. However, we have to keep the broader context in mind, especially as it regards the president’s reelection prospects.

1. There are margins of error to these jobs estimates. The jobs numbers that come out every month are based on two different surveys, the “establishment” survey that gauges employment based on businesses and the “household” survey that gauges it based on individuals. Both estimates are just that, estimates – based on a sample, with a margin of error. In the case of the “establishment” survey, the margin of error is approximately +/- 100,000 jobs per month.

2. When we factor in the margin of error, we find no statistically significant difference between December and the 2011 average. The average gain in nonfarm payrolls over the course of 2011, according to the establishment survey, was about 137,000 jobs per month. Some months were higher, others were lower, but almost always it has been within the margin of error for that number. And so it was this month -- 200,000 is not statistically different than what we have seen much of this year.

3. Seasonal issues cloud the December jobs report. As I noted last Friday, there was a quirky gain of 40,000 jobs in delivery services like UPS and FedEx. This will be “given back” next month, in all likelihood.

More broadly, per Cardiff Garcia of the Financial Times and BizzyBlog, there has been a strange development in the seasonal adjustments to holiday economic numbers since the start of the current downturn.

The economic data that the media reports is typically adjusted for seasonal factors to give us a sense of the underlying trends in the economy. However, the economic collapse in the fourth quarter of 2008 might have been partially interpreted by the statistical models that produce the adjustments as a change in seasonal patterns. So, the models may now be adding a larger seasonal correction than they should be. As we can see here, it makes a difference in the numbers that the media reports.

The formula that calculates the seasonally adjusted number started adding an extra 100,000 or so jobs to the December adjustment factor in 2008. If we take that out, we would have an actual print closer to 140,000 jobs, which (again) is right in line with the annual average.

4. This is not really “moving in the right direction.” The president wants you to believe that these job numbers are a sign of movement in the right direction. From a narrow perspective, it is. We were losing jobs, but now we are gaining jobs. However, when we ask the bigger question – i.e. is the economy starting to absorb (finally!) the slack in the labor market? – we find that we are not moving in the right direction. Instead, it is better to say that we have stopped moving in the wrong direction, and now we are simply standing still.

The reason has to do with population growth. We add about 140,000 people every month to the ranks of potential job seekers. So employment growth, in the broader sense of absorbing the excess capacity in the economy, requires gains of more than 140,000 per month. And we have not accomplished that this year.

5. The 2011 trend was not Obama’s friend. Historically speaking, voters tend to be forgiving of incumbent presidents whose early term is marked by economic stagnation if the trend is moving in the right direction by Election Day. This is a big reason why Ronald Reagan won a landslide reelection in 1984 despite unemployment still being high – all of the numbers on the economy were improving rapidly, and the electorate was more forward-looking than backward looking.

This does not really offer much hope for President Obama, at least as of now. Though the recession has nominally been over for two and a half years, the 2011 economic numbers were extremely weak. So weak, in fact, that if the election had been held in November 2011, the president likely would have lost. To appreciate this, consider the following chart, which tracks annual inflation- and population-adjusted numbers on GDP, employment, and income.

All of these numbers were basically flat to negative for Obama, something we have not really seen since 1980. Notably, the trend in the second half of the year was not much improved relative to the first, especially when it comes to incomes, which have declined for four of the last six months.

What about the declining unemployment rate? Chait makes quite a bit out of this, but in fact much of the year-over-year decline has been due to a shrinking workforce. Remember that the unemployment rate is calculated by dividing the number of people who are out of work but still looking by the total number of people who say they are in the workforce. Because of the length of this jobs recession, the number of people who claim to be in the workforce is near a 30-year low, and it has dropped substantially since Obama first took office (from 65.7 percent to 64 percent).

If we recalculate the unemployment rate based on the percentage of adults who said they were in the workforce at the start of Obama’s tenure, we get a very different picture from what the headline number suggests. The following graph demonstrates that by tracking the official unemployment rate (blue) against this “shadow” rate (red).

6. 2012 isn’t expected to be much better. The performance of the economy this year will likely matter most to Obama’s reelection. As mentioned above, if people feel like good times are right around the corner, they will be more inclined to back the president, even if the economic metrics are still lackluster.

The problem for the president is that the U.S. economy has been operating well below its postwar trend line for the last decade, and most experts expect that to continue.

Generally speaking, economists expect the fourth quarter of 2011 to show an acceleration of growth, but these gains are not expected to continue. Instead, the most recent survey of economists by the Wall Street Journal projects growth in the first three quarters of 2012 to average just 2.2 percent. This is only slightly better than the first three quarters of 2011, when the economy averaged 1.2 percent, and it compares unfavorably to the 1947-2007 average of 3.5 percent.

At a growth rate of 2.2 percent, we are really not going to see much change in incomes or employment. Remember, the U.S. population tends to grow by about 1 percent per year. So a growth rate of 2.2 percent is barely going to take up any of the enormous slack in the economy.

Nevertheless, 2012 remains the critical economic year for Obama’s reelection prospects. If we get growth better than the paltry 2.2 percent that the experts are expecting, and we see some real improvement in incomes and employment, then Chait may ultimately turn out to be correct. But we have not seen that so far, three years into Obama’s tenure, and the experts do not expect that for the fourth year, either.

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