By Richard Cowan
WASHINGTON (Reuters) - Here's a riddle: Many Republicans deny it's happening. Some Democrats don't want to talk about it. What is it?
The answer is the growing U.S. economy, on pace to expand as much as 3.5 percent this year, about the best performance in the industrialized world. Unemployment has fallen from 10 percent to about 6.3 percent and consumer confidence is at a six-year high.
Better economic data could help persuade voters in November to look past President Barack Obama's weak approval ratings and his unpopular healthcare law and give Democrats enough lift to hold onto the Senate and limit their losses in the House, political strategists said. Yet a debate about the actual state of the economy, which Americans consistently rate in polls as among their top concerns, may be missing in the run-up to Congressional elections.
"It's bad for Democrats to make the argument the economy is improving. Bad, bad, bad," said Erica Seifert, a senior associate at Greenberg Quinlan Rosner, which advises many Democratic candidates.
Instead, many Democrats are focused on promoting ways to improve the economy -- raising the minimum wage, providing affordable college education and closing the pay gap between men and women -- all while ignoring the positive signs.
That's because even though the data is pointing higher, many American voters see an economic landscape still littered with long-term joblessness, stagnant wages and excessive personal debt, Seifert said.
It's not just strategists who advise keeping the good news on the down low - politicians who might have been expected to trumpet how the nation has emerged from the worst recession since the 1930s are focused on improvements still to be made rather than the better data for the economy as a whole.
BATTLE FOR SENATE
Between now and Election Day on November 4, the battle for the Senate largely will be fought in Louisiana, North Carolina, Alaska, Arkansas and New Hampshire.
The big prize in November's elections is control of the Senate, as Republicans see 2014 as their best chance in years to end the majority control Democrats have enjoyed since 2007.
For example, in Louisiana and New Hampshire, it would seem as if a 4.5 percent unemployment rate ought to hearten Democratic Senators Mary Landrieu and Jeanne Shaheen.
If it does, they are not acknowledging it.
Asked about the possibility of a buffed-up economy improving her re-election prospects, Louisiana's Landrieu said, "It's not going to change anything about my campaign." She added, "I'm going to continue to run hard and not take anything for granted." Landrieu is a client of Greenberg Quinlan Rosner.
Shaheen, asked about economic indicators that normally would make a politician smile, said: "One of the things I continue to hear from people is concern about the economy, about jobs, about student loans, about...retirement." She added that her campaign will focus on how she has tried to tackle those problems.
Republicans are expected to maintain their hold in the House of Representatives, and possibly expand it, as midterm elections typically favor the party not in control of the White House.
Republicans have not let the positive data stop them from attacking Democrats' record on the economy.
"We are five years into Obamanomics and the economy is not improving," Representative Paul Ryan of Wisconsin said at an April 8 press conference. Ryan, the unsuccessful Republican vice presidential candidate in 2012, is a leading voice on conservative budget and economic matters.
Along those lines, Senate Republican leader Mitch McConnell, who faces a tough re-election battle in Kentucky this year, regularly talks about "the sorry state of the economy" under Obama.
However, Pete Brodnitz of Benenson Strategy Group, which advises Democratic candidates including Senator Jeff Merkley of Oregon, said it would be a "huge mistake" to ignore the economy's improvements during this year's campaigns.
"I personally think it's very important that Democrats talk about how we're making progress on the economy because if we don't, who will?'' he said. "If we don't, people will continue to believe" Republican claims that there has been no improvement, he said.
Consumer confidence already is building, according to surveys, and job creation has been showing gains.
There were 8.8 million jobs lost during the deep recession that began in December 2007. Now, employment is accelerating, with 9.2 million jobs added since February 2010, according to government figures.
Meanwhile, the national unemployment rate has declined to a 5-1/2 year low of 6.3 percent from a peak of 10 percent in October 2009.
The anticipated economic upturn, Bowman said, "is not a game-changer" in the November elections, "But it could help a few Democrats" hold onto their seats, he said.
With Republicans needing a net gain of six seats to win control of the Senate, a few seats turning in Democrats' favor due to the economy could determine whether Obama spends his last years in office with a divided Congress like now, or with one fully controlled by opposition Republicans. Senate Democrats are trying to defend 21 seats, compared to 14 being defended by Republicans.
"There are some green shoots that could possibly portend a little difficulty" for Republicans going forward, said Karlyn Bowman, a senior fellow at the conservative-leaning American Enterprise Institute where she studies public opinion.
And the pause in Washington's fiscal wars following last October's government shutdown has diminished the electorate's feeling of doom and gloom, Bowman said. That "will help incumbents" running this fall, she said.
"Signs of life in the economy could be a major plus for the Democrats," wrote Greg Valliere of Potomac Research Group in an April 21 note to subscribers. "Most Americans still think we're in a recession (it ended in June of 2009), but attitudes could change by Labor Day, which would give Democrats a crucial boost" in November, he said.
For now, too many Americans are not feeling the effects of an improving economy, said Ron Bonjean, a longtime Republican strategist and partner at Singer Bonjean Strategies.
"You need to have three or four months of solid job growth on the national and local level," he said, adding, "The number of people dropping out (of the labor force) needs to slow down" before Obama and his Democrats can even start touting it.
(Additional reporting by Lucia Mutikani. Editing by John Pickering)