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According to analysts from Wells Fargo, today’s NFP report shows data compatible with a Federal Reserve rate hike in September.  

Key Quotes:  

“Nonfarm payrolls rose 213,000 in June with the three-month average at a solid 211,000 jobs. The broad-based character of the labor market is evidenced by the rise in the diffusion index to 65.5 for all private industries and at 65.8 for manufacturing firms (compared to 59.2 a year ago). These job gains are consistent with 3.0 percent plus economic growth in the current quarter and a FOMC September rate hike.”

“The theory that workers and employers respond to higher inflation is revealed in the rise in wages, consistent with the recent rise in inflation.”

“Finally, real wages are up in many sectors as total CPI inflation is up 2.5 percent through May””note particularly finance, information and construction.  

“The number one problem most commonly cited by small businesses is finding qualified labor.”

“The pool of available labor””workers officially counted as unemployed plus those not in the labor force but want a job””continues to hover at the lowest rate since 2001. The dwindling availability of workers should resume downward pressure on the unemployment rate and upward pressure on wages, as some businesses try to attract workers via higher pay. Yet, with fewer workers on the sidelines and slowing population growth, we expect to see payroll growth moderate from the nearly 200,000 monthly average over the past year.”