Unemployment and Presidential Administrations

L. David Roper (roperld@vt.edu)

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Since the Franklin Roosevelt administration there have been 25 years with Democratic presidents and 31 with Republican presidents. I have studied the unemployment data for all of those administrations and have found the following:

The correlation between Republican administrations and increasing unemployment is high and the correlation between Democratic administrations and decreasing unemployment is high. However, one should allow for a time lag of unemployment relative to the tenure of an administration, as it takes a while for an administration to put its economic policies in place. Indeed, I found that the correlation between Republican administrations and increasing unemployment is highest for a lag of slightly more than one year.

The average yearly unemployment, allowing for a one-year time lag, was

• 5.0% for Democratic administrations (5.2% without a lag) and
• 6.3% for Republican administrations (6.0% without a lag) for the last fifty-six years.

The average yearly change in unemployment for the last fifty-six years, allowing for a one-year time lag, has been

• -2.2% for Democratic administrations (-3.1% without a lag) and
• +8.7% for Republican administrations (9.2% without a lag).

There might be some interest in comparing the recent Clinton administration (1993-2000) with the current BushGW administration (2001-2003) and the previous Reagan/BushGHW (1981-92) administration.

Allowing for a one-year lag, the

• Reagan/BushGHW administration had a yearly average of 7.1% unemployment (7.1% without a lag), the
• Clinton administration had a yearly average of 5.0% unemployment (5.2% without a lag) and the current
• BushGW administration had a yearly average of 5.9% unemployment (5.6% without a lag) up to now.

The average yearly change in unemployment, allowing for a one-year lag, was

• +0.1% for the Reagan/BushGHW administration (+1.2% without a lag),
• -4.1% for the Clinton administration (-7.5% without a lag) and
• +12.2% for the BushGW administration (+14.7% without a lag).

The following graph shows the unemployment data and the presidential administrations for the last 56 years.

The following graph shows the correlation coefficient between Republican administrations and unemployment for the last 56 years.

Some may argue that it makes a big difference which party controls the Congress as to whether a presidential administration can decrease unemployment. A quick study of the record for the last fifty-six years shows that Republican administrations did a better job of reducing unemployment when the Congress was controlled by Democrats, but it did not make much difference which party controlled the Congress with Democratic administrations.

I would welcome anyone to analyze the United States unemployment data with regard to the performance of presidential administrations for the last fifty-six years, if they think that the above is not correct, and inform me of any errors I might have made.

I leave it up to the reader to make any inferences from the analysis above about which party they should vote for in the upcoming presidential and congressional election.