All things considered, a politician is better off running for re-election when the economy is on the upswing. So Rhode Island’s new unemployment forecast is good news for Governor Chafee.

Rhode Island’s jobless rate is set to fall from a high of 11.6% in 2010 to 7.2% in 2014, according to projections Moody’s Economy.com offered at this month’s biannual Revenue Estimating Conference. Compared with last time, the new projection shows a lower rate in 2011 but then a slightly slower decline through 2016.

“This is based on 2010 coming in a little lower than expected, and also slightly stronger labor force
growth,” Zach Sears, Economy.com’s new Rhode Island analyst, told me in an e-mail. “So even as the jobs recovery continues and prospects for job seekers improve, discouraged workers returning to the labor force will prevent the rate from coming down faster.”

That would mean the unemployment rate will have fallen by about one-third by the time Chafee faces voters again in November 2014. And while 7.2% is still pretty high, the fact that the job market will be improving and still moving in the right direction should provide a boost to the independent incumbent.

As I wrote on the night of Chafee’s victory, the economy will likely make or break his first term. Other factors can and undoubtedly will influence the 2014 election’s outcome – but an improving economy will help the governor make the case to voters that they should give him another four years in the job.

Here’s the new unemployment forecast, with an arrow pointing at the 2014 election. Unfortunately, it also shows that the passage of an entire decade still won’t be enough to reduce Rhode Island’s jobless rate to where it was in 2006, before the Great Recession:

Of course, economists will remind you that these forecasts aren’t exactly infallible.