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Jobs data won't turn heads at Fed but it may hurt Democrats: Pros

Gary Stern
Peter Foley | Bloomberg | Getty Images
Gary Stern

Job growth is back on track, a panel of economic analysts said Friday on CNBC's "Squawk Box," after the September employment report. And the Fed is unlikely to alter its zero-rate policy in response.

"This is a positive report ... we might nitpick some of the specifics, but it's a positive report," said Gary Stern, former president of the Minneapolis Fed.

When asked whether the Fed should be acting sooner on revising its zero interest rate policy, Stern said the central bank is data dependent and the labor numbers don't show the entire picture.

"As Janet Yellen and other Fed officials have made clear ... the labor market conditions are the ballgame. And labor market conditions clearly have been getting better for a sustained period of time now, but the Fed is concerned that the numbers ... the gain in employment, the decline in unemployment rate, don't present the entire picture ... so they prefer obviously to be very cautious," Stern said.

He did note that the time for the Fed to take action is "gradually moving forward" and that the central bank is generally content with people believing that the rate hike will be coming in the middle of 2015.

Austan Goolsbee, former chairman of the Council of Economic Advisors under President Barack Obama, agreed with Stern that since this jobs report did not have any evidence of wage inflation, it is clear why the Fed has not taken action.

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Stern said that there has been too much negative emphasis on discouraged workers and the drop in the labor force participation rate.

"I think we've underestimated the importance of retirement here," Stern said, and pointed to the aging of baby boomers.

Stern also noted the decline in the unemployment rate, saying he expects people to be returning to work sooner and in greater numbers.

September nonfarm payrolls showed a gain of 248,000 jobs, versus an estimated 215,000—a bounce back from August's disappointing 142,000 count. The Bureau of Labor Statistics also reported Friday that the unemployment rate dropped to 5.9 percent, compared with previous expectations that it would hold steady at 6.1 percent.

Read MoreUS created 248,000 jobs in Sept vs 215,000 est

The professional and business services sector gained the most new jobs, adding 81,000. Wages remained stagnant, however, with the average hourly wage falling 1 cent to $24.53.

After the jobs report, the dollar index spiked to the highest level since mid-June 2010 and gold slipped under $1,200 for the first time this year. The Dow opened 113 points higher, the Nasdaq was up 27 and the S&P 500 rose nearly 13.

Read MoreDow futures make triple-digit jump on jobs report

Although the jobs situation is looking up, it may not be enough good news for Democrats going into the November elections, said Goolsbee. He expects Republicans to have strong gains in the upcoming midterms.

Kevin Hassett, former economic advisor to Mitt Romney's 2012 campaign for president, said the problem for Democrats is the disparity between the jobs' report's positive gain compared with the Democrats' political message of blaming the economy for helping the 1 percent but not "the little guy."

"When we actually start to see benefits to the little guy ... then Democrats are kind of uncomfortable talking about it. And so, you can just say 'hey the little guy is doing a lot better,' then you're changing your tune completely," said Hassett. "The data turning the other way is not something they have processed how to talk about."