The midterm elections turned into a referendum on the economy, the budget, and ObamaCare.  Democrats lost their House majority and substantially weakened their Senate majority by spending the 111th Session ignoring the first, refusing to deal with the second, and spending about half of their time passing the third despite widespread opposition to the bill.  Meanwhile, joblessness continued without much attention until the election rolled around, and the 9% jobless rate sealed the doom of Nancy Pelosi, if not Harry Reid.

What will unemployment be at the next election, and how will it impact voters in 2012?  The Wall Street Journal surveyed economists and found that an average of their projections will put it at 7.7% when voters go to the polls:

The U.S. jobless rate will be 7.7% in November 2012, the highest level for a presidential election month since Jimmy Carter defeated Gerald Ford in 1976, according to the average forecast of economists in the latest Wall Street Journal survey.

That rate is well below the 8.9% reported by the Labor Department for February, but still remains high as economists expect job gains to come slowly. “The labor market is a scar that will be slow to fade,” said Sean M. Snaith of the University of Central Florida.

On average, the 54 respondents—not all of whom answer every question—forecast the jobless rate will be 8.8% in June and 8.4% in December of 2011. They forecast the U.S. economy will add about 190,000 jobs a month over the next year—an improvement from the depressed level of job creation so far in this recovery, but still too low to bring the unemployment rate down quickly.

While the 7.7% rate in November 2012 would be the highest in seven presidential election cycles, analysts point out that it is often the overall trend—rather than the level of joblessness—that determines an incumbent’s fate. President Carter was defeated in 1980 by Ronald Reagan when the unemployment rate was 7.5%, lower than the level when he was elected but up from 5.6% earlier in his term. Meanwhile, President Reagan was re-elected in 1984 with the rate at 7.2%, but that was down sharply from the peak of 10.8% recorded in 1982.

A few caveats are in order in this analysis.  First, nothing here accounts for the civilian participation rate in the workforce, which has dropped to 64.2%, the lowest since 1982.  If that stays the same, then 7.7% won’t be as beneficial as it sounds, since it will mask a much higher drop in actual employment in relation to the population than the overall rate would indicate.  During the last expansion, that number was up to 67.2% at its peak, which means that a significant number of people have dropped off the grid.  And if they decided to start looking for jobs again, their return will spike the jobless number upward considerably even if the economy is producing a significant number of new jobs by then.

Next, the issue of trending is important but not necessarily decisive.  One key part of the context will be that Barack Obama pledged that his $787 billion stimulus would prevent unemployment from going above 8% in the first place.  Instead, the money is gone and interest payments are bogging down the budget, and it will have taken 3+ years to get down to a level that Obama predicted we’d hit before then without the stimulus.  Regardless of who gets the Republican nomination, Obama’s challenger will beat that projection from Christine Romer at every campaign stop from the conventions to Election Day — as well as the White House’s “Recovery Summer” PR campaign from last year.

Also, trends become important when their impact can be felt as a trend.  Drifting from 8.4% in December to 7.7% in November won’t have the same impact as Reagan’s drop from 10.8% in 1982 to 7.2% in November 1984, especially since civilian participation actually improved during that period.  The difference in economic production was palpable and impressive, not drifting, gradual, and almost accidental.

Could Obama get re-elected with a 7.7% unemployment rate?  It’s certainly possible, but it’s not enough of an improvement to increase his chances.  It will likely depend on the Republican challenger, and how good a case he or she can build to convince voters that GOP leadership can provide better stewardship of the economy.  Right now, that’s not a difficult case to make.