Many Democratic insiders argued that it's the overall direction of the economy that will be on voters' minds as they head to the polls.
"Even though the unemployment rate will be high, Obama will benefit from positive economic momentum," one said. "Take the economy away from [Republican presidential candidate Mitt] Romney and he will have nothing left."
"Right-track, wrong-track directional arrows will prove more influential in voters' minds when viewing the economy than what's in the rear-view mirror," another explained.
"The real question is whether voters feel we're heading in a positive direction," yet another Democratic Insider said.
Even some GOP strategists conceded there are signs of hope for the president on the number one issue in the 2012 election.
"It'll be neutral, but that's huge," one said. "It was a major liability until recently."
Another pointed out that it was all a matter of perspective: "7 is the new 4. In other words, the unemployment rate dropping even to 7% will feel like full employment. It could help neutralize the GOP's message."
But the vast majority of Republican insiders said that a painfully sluggish recovery coupled with skyrocketing gas prices portends bad things for an incumbent president.
"The media is going to try to argue that the upward trend is more important than the record over a whole term," one said. "But it's going to take a mass case of amnesia for the economic record not to be a major anchor on the president's case for four more years."
Another painted a grim picture of the state of the country's spirits.
"Forget the stock market results," the Insider said. "When everyone knows the unemployed by name, the kids move back in after college because there are no jobs, your house is so far underwater you call it Atlantis, and filling up the gas tank costs more than dinner and a movie, the election is about the incumbent's economic failures."
Some Democratic strategists warned the administration not to break out the champagne yet.
"Obama can scare voters that a Republican president would make things worse, but no way can he convince people that the economy is good and reason enough to reelect him," one said.
"There's a lot of unease and uncertainty out there," another added. "There is a sense that things are getting a little better but most people aren't fully seeing that in their lives."