Today’s report continued a long string of good reports, with 228 thousand new jobs being created last month, more than the 195 thousand that pundits expected.  The unemployment rate remained unchanged at 4.1%, near a seventeen year low.  Average hourly earnings inched up 0.2% last month and 2.5% over the last year, which is not bad.  The Labor Force Participation Rate remained 62.7%, which is unchanged.  The only negative was that the U-6 level or long-term unemployed inched up to 8.0%.

Because of the dislocations caused by the terrible hurricane season, the monthly jobs report for the last three months have been tainted and confusing.  Finally, we got a clean, traditional jobs report, and it was a good one.

Normally, a good report decreases the probability of the Fed increasing interest rates, but I don’t think that is true this time.  The Fed is committed to removing monetary stimulus, because the economy is strong and doesn’t need it.

So, why do we need a tax cut if the economy is already strong enough that the Fed is raising rates?