OK, the unemployment is now down to 8.8 percent, and the economy added 216,000 jobs last month. Here is the political economy of the situation, which is not as good for Team Obama as you might think:

1) Let’s not overstate the strength of the report: a) based on last two nasty downturns, 1974-75 and 1981-82, jobs should be growing roughly 400K a month; b)  nominal wage growth over both the last quarter and year have both been 1.7% vs. 2.1% inflation; c) the number of people who have been unemployed less than five weeks rose by 59K, first increase since November; d) the share of the unemployed who have been unemployed for more than 26 weeks also hit a record high of 45.5 percent. (Numbers compilation courtesy of the Economic Policy Institute.)

2) Political scientists have found only so-so correlation between unemployment and presidential election results. It’s really income growth that counts. And over the past year — and past two months — that has been negative. Shorter: jobs are being created, but they are not so high paying as before. Note that WH economic adviser Austan Goolsbee said today that he does not expect strong income growth unless the unemployment rate moves lower.

3) So let’s say it is Election Day 2012 and the unemployment rate is 8 percent — but housing is still frozen, wages are flat and broader unemployment rate is 15 percent. Then I think it is a 51-49 situation, with the winner depending on what kind of political athlete the GOP nominates.

4) I also note that O’s recent approval in the Quinnipiac poll was 42% and Reuters had the right track/wrong track number at 31-64 — the worst level of O’s presidency. This shows that a falling unemployment rate is necessary but not sufficient to boost voter optimism.

5) As I have written before:

It takes a while for people to really perceive that an economy has turned around, especially if unemployment is high. Bill Clinton won the 1992 election on the economy (“it’s the economy, stupid”) even though GDP had been growing for six full quarters (and at a pretty good clip). According to Gallup, 88 percent of Americans thought the economy was “fair” or “poor” in October 1992 with some 60 percent saying the economy was “getting worse.”

Two years later, it was the Democrats turn to feel the brunt of widespread economic anxiety as the Republicans captured both the House and the Senate. Even though the economy had then been growing for 14 straight quarters and the unemployment rate was down to 5.8 percent, 72 percent of Americans still thought the economy was “fair” or “poor” and 66 percent though the nation was headed in the wrong direction.

That’s right 3 1/2 years after the 1990-91 recession ended, the economy was still weighing negatively on voters and hurting the incumbent political party. Is it so hard to imagine, then, that three or four years from now voters will also be unhappy about the state of the economy and blame the party in power, the Obamacrats?