Wall Street Journal (08/18/14) Jon Hilsenrath

As U.S. Federal Reserve officials travel this week to their annual gathering in Jackson Hole, WY, where they and the world’s leading central bankers discuss economic issues, a growing number of economists believe slack in labor markets is diminishing, making the economy prone to inflation and financial markets prone to overshooting with short-term interest rates near zero. The unemployment rate fell to 6.2% in July from 7.3% a year ago, a decline far faster than Fed officials expected.

Fed Chairman Janet Yellen seems likely to acknowledge the improving job market, though she has argued for much of the year that slack and headwinds endure after the 2008-09 financial crisis. Fed forecasts show most officials expect to start raising rates next year. Many market participants see mid-2015 as the starting point. Top Fed officials believe they can be patient before starting to raise short-term rates.

Bloomberg (08/15/14) Nina Glinski

Consumer confidence in August dropped to a nine-month low due to depressed wage perceptions, according to the Thomson Reuters/University of Michigan preliminary sentiment index, which fell to 79.2 from 81.8 the previous month. The index was lower than any economist surveyed by Bloomberg had expected. There is mounting concern that earnings are not growing as fast as prices and pockets of weakness remain in the labor market.

Bloomberg (08/15/14) Jeanna Smialek

U.S. manufacturing production in July was the strongest in five months, increasing by 1.0% from the previous month, according to the U.S. Federal Reserve. Total industrial production grew 0.4%. “The manufacturing sector at this point appears to be firing on all cylinders and, if anything, that’s an indication that momentum in the U.S. economy is picking up,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC. “We’ve seen it in machinery and computers, and also in motor vehicle production.”

Washington Post (08/18/14) Ylan Mui

After years of being concentrated in fields with low wages, the recovery in the U.S. job market is finally spreading to industries with good pay. Hiring has picked up steam in areas such as construction, manufacturing, and professional services in recent months—sectors with a median hourly wage of at least $20. Nearly 40% of the jobs created over the past six months have been in high-wage industries, compared with just a quarter during the last half of 2013, according to an analysis by the National Employment Law Project. Meanwhile, growth in many low-paying jobs has leveled off or even declined.

Federal Reserve Bank of Philadelphia (08/15/14)

The 43 forecasters surveyed by the Federal Reserve Bank of Philadelphia expect the unemployment rate to drop from an annual average of 6.3% this year to 5.7% in 2015, 5.4% in 2016, and 5.3% in 2017. They also anticipate that the growth rate for nonfarm payroll employment will be 228,600 jobs per month in the third quarter and 211,200 in the fourth quarter, with their projections suggesting monthly gains in nonfarm payroll employment of 204,800 in 2014 and 214,000 in 2015. The forecasters also determined the natural rate of unemployment to be 5.5%, with their estimates ranging from 4.5% to 6.7%.