The Commerce Department reported July 27, 2018 United States GDP (gross domestic product -- the broadest measure of goods and services produced in the economy) grew at a 4.1% rate during the second quarter of 2018. Though the numbers were preliminary, the first snapshot of economic growth for the second quarter was quite impressive. It more than made up for a weaker first quarter and surely the Federal Reserve Board's Open Market Committee took note of these numbers when they met last week, especially the jump in prices reported during the quarter.
The strong quarterly data increases the probability of a hike at their September meeting. There will be one more jobs report released and an adjustment in the quarterly growth data before they meet again. Right now, the markets see all systems go for a hike in September unless there is a surprise or two in the interim.
The headline numbers show an increase of 157,000, jobs -- less than expected -- but the previous two months were revised upward. The unemployment rate of 3.9% was down from 4.0%. The increase in labor costs came in at 2.7%, close to the rate of inflation. Apparently, wages are not growing because workers are returning to the work force and worker shortages are only occurring within pockets of the economy.