Payrolls jumped by a seasonally adjusted 235,000 jobs in February, setting the Fed on track for another rate rise next week.
GDP growth is projected to lift in line with employment, wage rates and hours worked. At this stage, the Fed is still attempting to normalize interest rates rather than slow the economy to cool inflationary pressures.
Wage rate growth remains muted, at close to 2.5 percent, so rate hikes are likely to proceed at a gradual pace.
The need to tighten monetary policy is only likely to be seriously considered when wage rate growth [light green] exceeds 3.0 percent [dark green line]. Then you are likely to witness a dip in money supply growth [blue], as in 2000 and 2006, with bearish consequences for stocks.
*The dip in 2010 was a mistake by the Fed, taking its foot off the gas pedal too soon after the 2008 crash.