Jobs report could help Clinton win the election

Melina Mara | The Washington Post | Getty Images

Hillary Clinton and President Barack Obama at a rally in Charlotte, North Carolina in 2016.

Almost a Goldilocks number from the Labor Department this morning as 161,000 new jobs were created last month and the unemployment rate dropped to 4.9 percent.

The numbers have both economic and political significance. With average hourly wages climbing by 0.4 percent, recent monthly jobs gains revised upward and broader measures of unemployment falling markedly, the data clearly pave the way for Janet Yellen's Fed to raise rates in December.

Politically, the numbers may help another woman as well, as the drop in the both narrow and broad unemployment rates give Hillary Clinton some good economic news to share only days before the presidential election.

Of course, we will hear the typical hue and cry that, like other aspects of the economy, these data are "rigged," as the usual data trolls suggest that the most politically sensitive numbers, the actual unemployment rates, are probably higher than reported.

This trope is repeated with pneumatic regularity every month and during every political Administration, so why don't we just dispense with the nonsense?

Government economic numbers are compiled by career bureaucrats who serve Democrats and Republicans equally and honorably.

As for the data itself, it is encouraging. The economy, even this late in the cycle, is producing jobs at a solid, if unspectacular, pace. Wage gains are accelerating, which is as good for Main Street as the data are good for Wall Street.

As stated, the numbers raise the likelihood of a Fed rate hike after the election, but they do not suggest that the economy is overheating to such an extent that the Fed needs to get overzealous in its attempt to normalize interest rate policy.

On the inflation front, which just this week the Fed said was picking up, that is only partially true. Sure wage gains are advancing, but commodity prices have resumed their downdraft, which could more than offset the inflationary impact of modestly rising wages.

The Fed need not be panicked by the 0.4 percent jump in average hourly earnings. Wage gains should be accruing to labor at this point in the economic cycle.

However, that hardly suggests that inflation itself will automatically accelerate. There is plenty of spare labor and manufacturing capacity around the globe. The dollar has strengthened of late, dampening the risks of imported inflation. Long-term interest rates have risen at home, and abroad, tightening financial conditions in advance of any action from the Fed.

That is not only welcome but also it is a set of factors that can keep the Fed from acting too aggressively after the next, modest, rate hike.

It's the economy that is normalizing, which is very good news. While some data have softened of late, from restaurant sales to service sector activity, the jobs report should be a reassurance that, absent a policy mistake by the Fed, or by the federal government, this economy can continue chugging along.

Slow and steady wins the race it is said. When compared to the rest of the developed, and even parts of the developing world, the U.S. economy is performing admirably.

And that's more good news for the next president to share.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.

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