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Jobs, Mississippi equal good week for Democrats

Democrats can breathe a sigh of relief following the May jobs report, which showed a gain of 217,000 jobs and no change to the 6.3 percent unemployment rate.

The report was hardly a blockbuster, coming in well below April's 288,000. But it helps confirm that the disastrous first- quarter contraction of 1 percent in gross domestic product was likely an anomaly caused by the brutal winter and inventory reductions.

Workers use remote controls to check 32-inch television sets before they are repackaged at Element Electronics in Winnsboro, S.C., on May 29, 2014.
Reuters
Workers use remote controls to check 32-inch television sets before they are repackaged at Element Electronics in Winnsboro, S.C., on May 29, 2014.

Forecasts for the second half of the year remain for growth of close to 3 percent or more, which should keep job creation at its current pace or above. Democrats can also celebrate that total employment in May rose above 138.5 million, the pre-recession peak of 2008. In addition, the U.S. economy has now created over 200,000 jobs a month for four straight months, the first time that's happened in 14 years.

Those are all good talking points for Democrats hoping to overcome deep public dissatisfaction with the pace of economic growth, wages and employment under President Barack Obama.

Read More Steady as she goes: Job creation keeps up pace

Growth is not fast enough—and wages only rose 0.2 percent—to turn around negative views of the economy by November. But at least those numbers are not likely to get a whole lot worse. And they may even improve somewhat if subsequent months get closer to a 300,000 job creation level.

But the best news for Democrats may be that the numbers on Friday were not even stronger. This was clearly a "Goldilocks" report: Good enough to show a strengthening economy but not so good that the Federal Reserve gets even more nervous about future inflation and pushes forward its timetable for ending asset purchases and increasing interest rates.

The jobless rate is still stuck well above the Fed's forecasts and there is little evidence of nascent upward pressure on wages. So Democrats can probably rest easy that a dovish Fed will not try to tap the brakes on the economy until well after the November midterms and likely not until well into 2015.

Couple the Friday jobs report with Democrats newfound hopes to make the Mississippi Senate race competitive this fall and you have a pretty strong week for a party that otherwise faces dismal prospects in November.

Read More The GOP's Dixie dilemma

"This is the type of progress we'd like to be seeing in the economy," White House Council of Economic Advisors Chairman Jason Furman said on CNBC following the jobs report release.

But happy days are not necessarily here again for the Dems. Republicans have plenty to pick at in the jobs report including the small uptick in wages, the flat workweek at 34.5 hours and the fact that the labor force participation rate remained at a very low 62.8 percent and did not recover from last month's huge decline of 806,000.

The U-6 reading on unemployment, which includes those working part time involuntarily, fell 0.1 percent to a still-elevated 12.2 percent. The unemployment rate for Hispanics in May jumped from 7.3 percent to 7.6 percent.

And while Democrats can point to the new all-time high for employment, Republicans can just as easily say it took way too long to get there and celebrating where we were six years ago is a fairly lame thing to do.

Read More Chart: What's the real unemployment rate?

"The positive spin will focus on the fact that total employment finally exceeds the pre-recession peak. Well, about time," American Action Forum's Douglas Holtz-Eakin said in a research note. "But don't celebrate too much. The fraction of the population that is employed, 58.9 percent, remains 4 full percentage points below the pre-recession peak. Some of this is inevitable retirement of the baby boom, but not nearly enough to be happy about the state of affairs." Holtz-Eakin's conclusion about Friday's jobs report "about as exciting as watching paint dry."

That's exactly right and it's good for Democrats because it keeps the Fed compliant. But to really turn the economy into a positive rather than a drag this fall, Dems need jobs numbers with a much bigger "wow" factor.

—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.

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