US Labor Market Roars Back to Life, But Will Fed Hike Interest Rates?

The US labor market continues to show strength, with the Labor Department announcing that 162,000 payroll jobs were created in August. This far exceeds economists' consensus estimate of 55,000 and is a significant improvement over July's revised report of 21,000 jobs created.

However, despite this robust job growth, average hourly earnings rose only 0.3% to $37.75 per hour in August, and the Consumer Price Index (CPI) remained unchanged at 4.1%. This has led some to question whether the Federal Reserve should raise interest rates at its upcoming meeting.

One analyst believes that a rate hike is still possible, citing higher market rates due to rising Treasury yields. However, another view holds that inflation data may yet change the story, and it's best not to worry about a potential Fed rate hike until the CPI and PPI data for August are released.