Today's employment report underscores ongoing labour market imbalances in supply and demand. Strong wage growth in particular reinforces the risk of an ongoing wage-price spiral. As a result, we believe the report is consistent with ongoing rate increases from the Fed. On the margin, today's strong numbers increase the risk the Fed will raise rates gains by 75bp in September, above our current expectation of 50bps, although that action will likely depend on the July and August CPI reports. We estimate core CPI inflation to moderate to 0.5% M/m in July from the 0.7% seen in June. - Nomura
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