The Latest Pillow Talk From Janet Yellen A September rate hike is on the table.

 http://www.wsj.com/articles/hilsenrath-analysis-june-jobs-report-raises-chances-of-fed-rate-increase-in-september-1467985156?tesla=y

Relieved Federal Reserve officials aren't likely to see Friday’s strong jobs report as a reason to raise short-term interest rates when they meet later this month, but the numbers do increase the odds of a rate move as early as September.

Policy makers are likely relieved by the Labor Department’s report Friday that employers added 287,000 jobs in June. The gain was in part a bounce back from anemic payroll growth of 11,000 in May. Looking at the two months together, they averaged 149,000 jobs added a month, roughly in line with the pace of growth officials believe is needed to keep the unemployment rate below 5%. For the second quarter as a whole, payroll growth averaged 147,000 a month, down from 196,000 in the first quarter and 229,000 in 2015.
Taken altogether, the pace of job creation appears to have cooled in recent months, despite the strong June number. But the slowdown wasn’t as severe as officials feared a month ago and was expected because an economy growing just 2% a year can’t be expected to sustain payroll gains in excess of 200,000 a month.
For the Fed, this helps resolve a set of questions Fed Chairwoman Janet Yellen posed last month: “Is the markedly reduced pace of hiring in April and May a harbinger of a persistent slowdown in the broader economy? Or will monthly payroll gains move up toward the solid pace they maintained earlier this year and in 2015?”
The answer: Somewhere in between.

Fed officials got some good news on wage growth. The 2.6% year-over-year growth in average hourly earnings of private-sector workers registered in June will strengthen the Fed’s conviction that waning slack in labor markets is putting modest upward pressure on wages. The annual rate of wage growth has lifted from levels near 2% for much of the postrecession expansion.
Other pieces of the report underscore the idea that slack in the labor market is diminishing gradually. Though the jobless rate ticked up to 4.9%, a broader measure of unemployment which includes part-time and discouraged workers dropped to 9.6%, the lowest level since April 2008.
In sum, the employment report increases the chances of a Fed rate increase in September, but officials are likely to remain in a wait-and-see mode until then, and will likely pass on moving in July.