How bad is the May jobs report this morning?

Well, the downside is that “how bad is it?” is the correct way to frame the question. For the economy, and for Barack Obama’s re-election hopes, it certainly is bad news.

For an economic analysis, economist Jared Bernstein has a good summary:

The deceleration in payroll job growth is alarmingly clear…Over the past three months, net job gains have averaged 96,000 per month, compared to 252,000 in the prior three months…This has obvious negative implications for family budgets, but it also threatens the macro-economy.  If this pace of job growth sticks, the economy will slow down from a growth rate that’s already too slow.

The closest he comes to a silver lining is:

It’s always possible with these monthly reports that some statistical anomalies are in play.  A candidate in this case is weather effects, as unseasonably warm weather last winter probably moved job growth that might have occurred in May to earlier months. If so, that would imply that taking an average of more months of data would give you a more accurate read on the true underlying pace of growth.  Over the last six months, net monthly job gains have been 174,000, so a lot depends on whether the current weak trend persists.

As for the political effects: for now, at least, what we have is additional confirmation that Barack Obama is running for re-election with a stagnant economy — not a boom that would make him a heavy favorite, but not a collapse that would make Mitt Romney’s victory certain, either. One shouldn’t get too caught up in the hype here; this is one bad number in a stream of data that overall appears to point to a close race, and one number is never going to be enough to change the overall picture very much.

What this might mean for those following the presidential campaign is that this may well be an election cycle in which the small but real effects that campaigns and candidates can make could be decisive. You can think of a presidential election as a combination of objective factors (economic growth, perceptions of the performance of the president) that basically set the parameters of the election, yielding a small range of likely outcomes. In 2008, with the economy tanking, the entire range pointed to an out-party victory; in a year like 1996 or 1984, with the economy healthy, the entire range fell well within re-election for the incumbent. This may well be a year in which the range straddles wins for either side. That still doesn’t necessarily make silly-season nonsense — the one-day stories in the spring that are long forgotten by fall — any more important, but it can definitely mean that the real campaigning could very well make a difference. And that’s how it’s been for many months now.

Bottom line: the May jobs report is certainly bad news for the economy and for Barack Obama, but so far at least there’s nothing here to change the entire trajectory of the campaign.