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Jobs report underscores Obama's economic dilemma

The September jobs report perfectly captured the frustrating nature of the current economy, showing a healthy gain of 248,000 positions and a reduction in the jobless rate to 5.9 percent but no gain at all in hourly wages.

The report also highlighted the vexing and possibly unsolvable problem for President Barack Obama and the Democrats who want to take credit for measurable improvements in the economy from the rancid depths of 2009 but can't effectively cheerlead a recovery that the vast majority of Americans barely feel.

In most respects, the September report was quite strong. August's soft number got revised up to 180,000 and July was boosted to 243,000 from 212,000. History tells us September could get revised higher as well.

But there was a soft underbelly as well.

The size of the labor force dropped by nearly a hundred thousand putting the participation rate at a more than three-decade low of 62.7 percent. Before the recession the rate was 66 percent.

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Even more troubling, average hourly wages actually dropped a penny to $24.53. The so-called U6 jobless rate, which takes into account involuntary part-timers and those too frustrated to look, is still at a very high 11.8 percent.

Obama's economic dilemma was on full display this week when aides touted a big presidential speech on the economy at Northwestern University's Kellogg School of Management. The speech was intended to show voters who give the president dismally low marks on the economy that Obama was on the case while highlighting all the improvements over six years ago.

But the speech, which included a tired recitation of previous proposals that went nowhere on Capitol Hill, fell completely flat. In fact, the only real headlines out of the address were generated by Republicans crowing over Obama's remark that: "I am not on the ballot this fall. … But make no mistake: these policies are on the ballot. Every single one of them."

Democratic candidates in competitive Senate races are running as fast they can away from the president and his low approval ratings. But now GOP ad makers have a perfect sound bite to run in Arkansas, Louisiana, North Carolina, Alaska, Iowa and elsewhere tying Democrats directly to the president.

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How Obama could have made such a rhetorically boneheaded move is hard to comprehend.

Polls show the public has largely rejected Obama's stewardship of the economy. They also show that the economy is the No. 1 issue in the midterms. The last thing the party wants are voters in battleground states making their decisions based on Obama's economic record. But now they may do exactly that and at the president's own request!

It seems like it is probably time for the White House to give up on the idea that the president will get much credit for where the economy is right now. Most of the policies that had significant impact—the stimulus and the bank bailouts—are well in the past. Since the 2010 midterms, Obama has little to show on trade deals, tax reform, immigration reform or any of the other big-ticket items that could move the economic needle and drive up wages and the pace of growth.

The White House argues that Obama tried on a lot of these items by sending proposals to the Hill. All fair and true. But people don't really care about what you tried to do (and in many instances the White House didn't try very hard). They care about what you actually did.

But there may yet be hope on the horizon for beleaguered Democrats hoping to maintain control of the Senate. According to Politico's Maggie Haberman, Hillary Clinton is preparing a midterm political blitz to aid Democratic candidates in Kentucky and other swing states.

The Clinton brand is much stronger than the Obama brand right now, particularly on the economy where voters still recall the Bill Clinton years quite fondly. Hillary Clinton may have some heavy foreign policy baggage from the Obama years but she is not tied to people's ill feelings about the president's job on the economy.

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Hillary Clinton can also make the midterms about the Democratic Party's future, not the last six years of painful, plodding, poorly distributed economic growth. That may not turn out to be enough to keep the GOP from picking up the six seats needed to retake Congress's upper chamber. But it's certainly preferable to Democrats than making the election all about Obama.

—By Ben White. White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.