The soft January employment report showing a gain of just 113,000 jobs suggests that what Democrats hoped would be a big advantage in the midterm elections this fall—a rapidly strengthening economy—may not materialize.
It remains too soon to say whether the weak numbers of the last two months—December was revised up by only 1,000 to 75,000—reflect the impact of a brutal winter and other technical factors, or a more serious slowdown in hiring.
And there was some good news in the household survey, which showed a slight rise in the labor force participation rate to 63 percent and an increase in total employment of 616,000.
But thus far, the trend in hiring this year is way down from last's average of 194,000 per month, the inverse of what many forecasters predicted. And some economists suggest the underlying data do not support the idea that recent weakness is weather-related.
"The weak rise in payrolls was despite a fairly low reading for the household survey series on nonfarm workers with a job who did not work because of bad weather," Jim O'Sullivan of High Frequency Economics said in a note to clients. "The details do not suggest that weather was the reason" for the soft report.
Democrats are counting on a pickup in economic growth and job creation to counter what is usually a big advantage for the party out of the White House during the sixth year of a president's term.
Not even an economy creating hundreds of thousands of jobs a month would likely be enough to help take the House back for Democrats. But the party was hoping that an improved employment situation and faster growth would convince swing voters not to toss out vulnerable Democratic incumbents in Louisiana, Alaska and North Carolina or flip open seats including Montana, West Virginia and South Dakota to the GOP, which needs a net gain of six to take the Senate.
The midterms are likely to be a referendum on the Obama administration, which is already struggling mightily with implementation of its unpopular health-care law. The White House took another big hit on the law this week with release of a CBO report showing it would likely cause up to 2.5 million people to leave full-time work by 2024 due to new health-care subsidies.
The White House tried to spin the report as a positive, suggesting the new subsidies would relieve "job lock" and allow those working full time in jobs they don't like just for the health-care benefits to do something else. And that something else might include getting new skills or starting a business.
(Read more: Three reasons Boehner hit pause on immigration)
Sure, it might. But it also might mean retiring earlier or just working less, thus adding less to the economy and paying less in taxes to support programs like Obamacare. The CBO report presents a big problem, both politically and on policy terms, for the White House hoping to avoid big midterm losses.
A combination of low ratings for the health-care law, a recent CNN poll showed just 35 percent approve of Obamacare, and a stagnating economy would be disastrous for Democrats in November and likely lead to the party losing the Senate. That would in turn make the following two years a nightmare for the Obama White House.
The weak jobs report has other significant implications.
It was probably not bad enough for the Fed to change course in its plans to continue tapering asset purchases by $10 billion per month. That course seems very firmly set unless conditions turn far worse.
Newly installed Fed Chair Janet Yellen will get another month's worth of data before she meets the press after the next FOMC meeting ends on March 19. But even another middling jobs number would likely not slow the pace of QE reduction given that Yellen and other FOMC members do seem to think the purchases have been that helpful and are very eager to wind down the policy.
The next question will be whether the Fed explicitly or implicitly moves away from its current target of 6.5 percent unemployment to begin tightening policy. We are now just 0.1 percent away from that number and few would argue the job market and the broader economy are picking up significant pace.
(Read more: Debt-limit surrender may depend on concessions)
Finally, the jobs number has implications for the debt ceiling debate. The U.S. formally bumped up against the limit on Friday. And the Treasury now has a few weeks of emergency measures available to avoid default.
GOP leadership in the House has no appetite for a big fight. But there remains no clear path to getting a bill to lift the debt limit through both chambers of Congress. That's likely to happen in the next few weeks but even the hint of a debt ceiling problem could be enough to further dent confidence in an economy that is clearly not thriving.
—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