Rising wages erode Trump's stagnation narrative

You know Donald Trump is not doing well when he goes back to saying everything is rigged. And that's exactly what he did Friday following an employment report that showed a solid gain of 161,000 new jobs and the fastest wage growth since the recession ended seven years ago.

At a campaign stop in New Hampshire, Trump called the jobs report "disastrous" and "phony."

Donald Trump
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Of course, it was neither. The headline number was slightly below expectations but that could have been a result of Hurricane Matthew, according to the Bureau of Labor Statistics. And there is nothing phony about the numbers. They are compiled by career professionals who are the best in the business at what they do. They operate outside any kind of political influence.

But attempting to undermine trust in institutions is an essential part of Trump's campaign. It is a corrosive approach that plays to the worst instincts among voters to simply decide facts they don't like are not actually facts. In recent days, the Trump campaign has also tried to promote a debunked report about a potential indictment coming in an apparently nonexistent FBI probe into the operations of the Clinton Foundation.

And Trump is more inclined to go down this road when things are not going his way. When polls started showing him closing the gap with Hillary Clinton, those polls were all of a sudden no longer rigged against him. But now they are moving back the other way.

The Washington Post/ABC News tracking poll that briefly showed Trump moving into the lead now shows him down 3 points again. Early voting trends are bad for Trump in Nevada and North Carolina and Clinton has moved back into a slight lead in Florida. If Clinton wins Florida, Trump has no path to 270 electoral votes. And her massive lead among Hispanic voters could push her over the top in the Sunshine State.

Trump also has little chance if he doesn't win Pennsylvania and he continues to trail there by at least 4 points. So expect to hear more complaints from Trump in the final four days of the campaign as it begins to become clear to him that he is not going to be president of the United States.

Trump, of course, could have made a more nuanced critique of the October jobs report, which did show a decline of 195,000 in the size of the labor force, reversing some of the big gains seen in September. But the action in the report was not in the headline numbers.

The big news came in the 0.4 percent wage increase that drove the annual rate of growth to 2.8 percent, the fastest rate since 2009.

Stagnant wages have plagued the economy since the recovery began, helping drive voter anxiety and aiding the rise of Trump's brand of aggressive, nationalist populism. That story is now changing.

"This is clearly a boost to the Clinton campaign. The economy is solid and most importantly wage growth is accelerating," Mark Zandi, chief economist at Moody's Analytics, told me Friday. "And most people think of their financial world through the prism of their paycheck. Now they can say it's bigger than last year."

The jobs report comes after a reading last Friday showing the economy grew at 2.9 percent pace in the third quarter, much better than the anemic rate earlier in the year and undermining Trump's case that the economy has stalled.

The increase in wages and slightly faster economic growth help explain why President Barack Obama's approval rating continues to rise and why he is such a major force for Clinton on the campaign trail.

The economy has not been the kind of benefit to Clinton that the campaign hoped it would be. But it is certainly not a drag on her. And Trump's arguments that the numbers are simply faked will not draw in the kind of educated, suburban voters he would need to actually close the deal and win.

—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.