The headline on last Friday’s monthly employment report was the first monthly decline in jobs in 7 years (down 33,000).  But the Fed found solace in the wage growth figure (up 2.9%).  This metric has been critical in the Fed’s decisions to keep rates low as many FOMC voters consider wage growth a critical part of their mandate.  The thinking is wage growth raises living standards and leads to general inflation.  The 2.9% increase was surprising and welcome news, but next month’s number will be closely watched as the increase could be hurricane related (exacerbating short term labor shortages).  Today’s release of Fed minutes all but confirms a rate increase in December (the futures market shows an 87% probability).  The minutes show some members voicing concern that the existing low inflation environment may be “persistent”, with others afraid that inflation could “run away unchecked” if they keep rates too low too long.  Meanwhile, the “great unwind” (balance sheet reduction) is beginning this month. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners