What Hillary can do after the crummy May jobs report

Friday's May jobs report was a dumpster fire any way you look at it. And it cannot have made Hillary Clinton's Brooklyn, New York, campaign staff very happy.

The economy created just 38,000 jobs last month, more than 100,000 off the consensus expectation of 160,000. But that was far from the worst part.

The size of the labor force shrank by 458,000, driving the participation rate down to an abysmal 62.6 percent. The decline pushed the unemployment rate down to 4.7 percent, the lowest since November of 2007, but for all the wrong reasons.

Hillary Clinton, Democratic presidential candidate
Melina Mara | The Washington Post | Getty Images

There was no good news to be found anywhere in the report. March and April jobs gains were revised down by 59,000. The three-month average is now down to 116,000 per month. As the economy approaches full employment the jobs engine is clearly slowing. And that is not good news for a Democrat hoping to hold onto the White House.

Clinton's likely Republican challenger, New York brand manager Donald Trump, wasted no time jumping on the awful report. "Terrible jobs report just reported. Only 38,000 jobs added. Bombshell!," the presumptive GOP nominee Tweeted before moving on to comment about how he no longer watches MSNBC's "Morning Joe."

If there is any silver lining for Clinton, the report likely means the Federal Reserve will hold off on another rate hike at its meeting later this month. But that just means it will try and hike later this year assuming the June and July jobs reports aren't so crummy. The July meeting has no news conference so a hike then is unlikely, though not impossible.

Democratic presidential candidate Hillary Clinton
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The report underscores the tenuous nature of Clinton's efforts to convince Americans to entrust the White House to Democrats for another four or eight years. The economy is obviously dramatically better than it was when President Barack Obama took office in the midst of the devastating financial crisis. But it's not great and it appears to be deteriorating. Growth and wages remain sluggish (though the pace of wage increases is rising) and the labor force is moving in the wrong direction.

Clinton's campaign may hope this is just a one-off report, driven down by the Verizon strike subtracting 34,000 jobs. And they may be right. An economy approaching full employment will not create 200,000 jobs a month. But it should do better than this.

"Is the paltry 38K gain real? Well we hope not," MUFG Union Bank's Chris Rupkey wrote in a note to clients. "We were thinking the speed would be 150-170K on average for this point forward."

Joseph Biden and Hillary Clinton
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Other data also suggest that May's weakness was exaggerated and June should look a bit better. "The pattern will naturally be read as evidence of slowing, although the data can be volatile and a significant change in the trend is not being signaled by [jobless] claims," HFE's Jim O'Sullivan wrote in a client note.

Still, Clinton may have a hard time running on the economy as a big selling point. But given the nature of her opponent, she may not really have to. Trump sparked widespread outrage on Thursday when he told The Wall Street Journal that the judge in the lawsuit against Trump University could not be fair because of his Mexican heritage. This kind of rhetoric worked well in the GOP primaries for Trump but it's not likely to endear him to the broader electorate he will need to have a chance against Clinton.

And Clinton roasted Trump on Thursday in a foreign policy speech in which she cast the GOP front-runner as a danger to the world who can never be trusted with nuclear weapons. "This is not someone who should ever have the nuclear codes," Clinton said. "It's not hard to imagine Donald Trump leading us into a war just because somebody got under his very thin skin."

This could wind up being Clinton's biggest weapon much as it was for Lyndon Johnson against Barry Goldwater in 1964. Johnson's famous "Daisy" ad, which only aired once, portrayed Goldwater, without ever mentioning his name, as a dangerous extremist who could drive the nation to nuclear war. If Clinton can disqualify Trump as a wild-eyed madman who could risk America's national security, a couple of crummy jobs reports won't matter.

— Ben 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.