In 1804, President Jefferson defeated Federalist nominee C.C. Pinckney to win reelection, 162 electoral votes to 14, which may have been the last presidential election where the economy wasn't an issue. (Granted, records from that era are a little spotty.)
Regardless of whatever strife is going on during an election year - and the America of, say, 1864 or 1944 was undergoing far more strife than the America of 2012 - economic issues are always the first things on many voters' minds. Throughout history, when the electorate has been largely overjoyed with the economy, it's been rare to switch out captains in the middle of the voyage. However, in the words of current Republican hopeful Ron Paul, people vote with their bellies, and it's not news to anyone that voters' bellies have not been operating at full capacity lately.
SEE: How Much It Costs To Become President
Assuming that the online gambling sites are correct in their odds making, and that Mitt Romney will indeed be the Republican nominee in November, voters will at least have a clear pair of track records to select a president from: Romney's 2003 to 2007 tenure as governor of Massachusetts and Barack Obama's current presidential administration. How each handled spending, taxation, job creation and general prosperity will be a major criterion when many voters make their selection. (For more on politics and the economy, read Parties For Taxes: Republicans Vs. Democrats.)
The seasonally adjusted unemployment rate reached a local nadir of 4.3% in the spring of 2007. Since then its rise has been pronounced, almost vertical. A persistent lack of jobs across the nation, unlike any seen in the past 28 years, resulted in double-digit unemployment in October of 2009. Granted, the difference between 10 and 9.9% is largely psychological, but 10% means that when unemployment falls to 8.5%, which is where we're at today, it's relatively good news. That is of little solace to every 12th person you see.
The last time unemployment was even as high as 8.5% (not counting early 2009 of course, when unemployment was on the ascent to that 10% peak) was in November of 1983. A year later, incumbent Ronald Reagan won by landslide, carrying every state but one.
So, is unemployment not positively correlated with a presidential turnover? Surprisingly, the answer seems to be yes. Throughout the summer of 2000, unemployment was below 4%, the lowest it had been (and has been) since 1970. Incumbent Bill Clinton was term-limited, but voters could support his hand-picked successor, Al Gore, and presumably get more of the same. Gore eventually won an Oscar and a Nobel peace prize, but not the presidency.
What about stock prices as an economic issue? The Dow Jones Industrial Average is necessarily limited in its scope, but it's a suitable indicator for our purposes. The Dow is correlated with the value of people's stock portfolios and retirement funds, which you'd figure would be on their minds if they're in a position to replace or reelect the nation's chief executive. (For more, read Don't Let Stock Prices Fool You.)
The Dow bottomed out in March of 2009, mere weeks after Barack Obama assumed office. Since then it's risen gradually and consistently, almost doubling. Under Obama's predecessor George W. Bush, the market went through some rapid highs and lows: the dotcom bubble of late 2002 to early 2003, and the irrational exuberance of the fall of 2007. In November 2004, the one time during Bush's tenure that voters had an opportunity to either reelect or oust him, they chose the former. On the election's eve, the Dow was at 10,388: the highest it had been since January, well above the lows of the previous winter, but below the highs of the spring of 2001, shortly after Bush had taken office. In 1996, Clinton won reelection while the Dow was rising. In 1992, George H.W. Bush lost despite the Dow doing pretty much the same thing.
It seems that drastic things have to happen to the Dow for voters to express displeasure. In the 1932 election, the first one after the stock market crash of 1929, incumbent Herbert Hoover lost by a landslide to Franklin Roosevelt. In 1928, Hoover had coasted to office on the more favorable end of a similar landslide.
The Bottom Line
With the predictive value of previous elections notwithstanding, 2012 voters have a unique set of economic issues to concern themselves with. Previous generations didn't have $15 trillion in public debt. Nor did they have a housing market that bottomed out years ago and still shows zero signs of recovering. Most significantly, they didn't have the combined concerns consistently cheap money offered by the Federal Reserve and a whole bunch of enormous bills coming due at the same time.
With the recent bailouts of secondary mortgage market makers Freddie Mac and Fannie Mae, not to mention cash infusions to other countries, calls for student loan debt relief and $400 billion of funding on the horizon as the provisions of 2010's Patient Protection and Affordable Care Act become law, voters in this year's presidential election have plenty to concern themselves with this November, beyond the usual campaign issues of national security and social cohesion. (For more information, see Why Housing Bubbles Pop.)