A key figure in 2010 election: U.S. jobless rate

By Thomas Ferraro

WASHINGTON (Reuters) - The key number in next year's U.S. congressional election may be the unemployment rate, which last month hit a 26-year high of 9.8 percent.

The figure helps explains why creating jobs is a top priority in the Democratic-led Congress where lawmakers know their own jobs are at stake if they fail to deliver.

Democrats will get an early whiff of whether they are being blamed for the economy on Tuesday, when voters go to the polls to elect governors of New Jersey and Virginia and a congressman in a conservative-leaning New York district bordering Canada.

In next year's election, the Democrats face a head wind. The party in power typically loses seats in the election after a new president -- in this case Barack Obama -- takes office.

The wind could become a storm if the ranks of the unemployed swell. The rate is widely forecast to top 10 percent before going down.

Analysts say a double-digit jobless rate on Election Day in November 2010 could help cost Democrats upward of two dozen seats in the House of Representatives, which they now hold, 256-177, with two vacancies. It could also cost them in the Senate, which they control, 60-40.

"The election is going to be about three issues: Jobs. Jobs. Jobs," said Ethan Siegal of The Washington Exchange, a private firm that tracks Congress and the White House for institutional investors.

Signaling the end to the deepest recession since the 1930s Great Depression, the government said last week the U.S. economy grew at a robust 3.5 percent pace in the third quarter.

Democrats credit the recovery, in part, to the $787 billion economic stimulus package that was passed this year over Republican objections.

But the job market, often a lagging indicator, is taking far longer to show improvement. How long it lags could be pivotal. The White House is bracing for unemployment to stay high through the first half of next year.

The first sign of how the economy fared in the fourth quarter comes on Friday, when October's unemployment figures are released.

REFERENDUM ON OBAMA?

Obama won't be on the ballot next year. But Democrats acknowledge the election will be a referendum on his presidency, and that they need his help to retain their big majorities in Congress.

If the jobless rate is sinking late next year, Obama's approval rating, now a little more than 50 percent, could be on the rise, making him more of a political force.

If the unemployment figure remains high, Obama's numbers may fall and that could hurt his ability to help raise campaign contributions and get out the vote for Democrats.