Friday’s employment report showed progress in the labor markets, but not at the level expected, and probably not enough to bring the FOMC to raise the federal funds rate at their September meeting—although some economists still believe a rate hike this month is possible. Nonfarm payrolls rose 151,000 in August, but earnings were up just 0.1% M/M and 2.4% Y/Y. Goods producing payrolls are down, but service sector jobs had a good month, including a 25,000 increase in government jobs. The unemployment rate remains at 4.9%.

July was a good month for the consumer, with personal income increasing 0.4% and the savings rate increasing 0.2% to 5.7%. Consumer spending was also up 0.3%, which represented a slight slowing from the previous two months. Despite the increased income and spending, the PCE (personal consumption expenditures) price index was unchanged, with the core PCE index (excludes food and energy) was up just 0.1% M/M and 1.6% Y/Y, meaning inflation is scarcely advancing toward the Fed’s desired 2% rate.

The Conference Board’s consumer confidence index, which surveys attitudes about the economy, exceeded estimates with a 4.5-point jump in August. This follows a strong June and flat July. Many reported that their incomes were improving and buying plans included a jump for homes. However, there was also a 1.3% increase in those describing jobs as “hard to get.” Overall the positive report reflects trends seen in other consumer reports.