BLS Employment Situation: 255,000 jobs added to the economy in July. Unemployment holds at a very low 4.9%.

The economy really is picking up steam and today's jobs report points to even greater strength from the consumer. Nonfarm payrolls surged a much stronger-than-expected 255,000 in July. The strength is underscored by a 5,000 upward revision to June which is now at 292,0000 and also to May, now at 24,000 for a 13,000 gain.

Confirmation of strength is a rise in the participation rate, 1 tenth higher at 62.8 percent, which pulls up on the unemployment rate that however held at a low 4.9 percent. Wages further confirm the strength, with average hourly earnings up a sizable 0.3 percent and the year-on-year rate up 2 tenths to 2.6 percent. And for the first time since January, the workweek moved higher, up 1 tenth to 34.5 hours.

And there's more strength to come looking at the industry breakdown where the most sensitive category shows solid gains as professional & business services rose 70,000 following May's sizable 53,000 increase. Within this, temporary help services, which businesses typically turn to before making permanent hires, rose 17,000 vs May's 22,000 jump. Construction was also strong in the month, up 14,000, as was retail up 15,000 and financial activities up 18,000. Government supported the strength, at a gain of 38,000.

Slack is diminishing in the labor market and the pop higher in earnings could be a sign of things to come. The hawks will come out of hiding following this report which definitely brings alive expectations for a rate hike at the September FOMC.