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'Goldilocks' jobs report fuels Fed interest rate debate

The "Goldilocks" not-too-fast, not-too-slow July employment report drove an improvement in stock market sentiment early Friday, while adding fire to the debate among Fed watchers on whether the central bank should be acting sooner to normalize monetary policy.

Marking the sixth straight month of 200,000-plus nonfarm job growth, the government said Friday the economy created 209,000 new positions in July, with an unemployment rate of 6.2 percent.

Wall Street estimates had been calling for a larger jobs gain of 233,000 in July and a slightly rosier unemployment rate of 6 percent.

Read MoreJob creation missesexpectations, rate up to 6.2%

Right after the jobs numbers were released, a panel of experts on CNBC's "Squawk Box" expressed mixed views on what the report should mean for Fed policy.

"Their policy is way out of whack with the reality of the data," said Peter Boockvar, chief market analyst at The Lindsey Group. "The problem is the data is not great but it's good enough to remove what they are doing."

Tony Fratto, former deputy press secretary for President George W. Bush, disagreed.

"If this is what we're looking at, the pace [of the Fed] is just about probably right to continue to unwind and and do it in a measured way." Fratto's expectation was for July jobs growth of 320,000—much higher than consensus estimates.

"Squawk Box" tweeted out Fratto's prediction, along with those of all the panelists.

Mark Zandi
Adam Jeffery | CNBC
Mark Zandi

Looking at the recent economic numbers, Moody's Analytics' chief economist, Mark Zandi, said: "You take my growth trajectory [of 3 percent year-end GDP], we're not back to full employment to late 2016. So in that case ... momentary policy is in the right place."

Austan Goolsbee, former chairman of the Council of Economic Advisers under President Barack Obama, was less optimistic about what the July jobs report means for economic growth going forward.

"I hope Mark [Zandi] is right that it gets up to 3 percent-plus. But I'm afraid ... because if you take out the pent-up demand on autos and you take out the inventories, we're back down to like 2.5 percent to 2.8 percent," Goolsbee said. "The job market is improving, but it's improving relatively slowly, so the Fed's approach of slow phase out is appropriate."

"If we're only growing 2.5 percent," he continued, "[the Fed] should not tighten sooner or it'll drive us into recession."

Ahead of the jobs numbers, two regional Fed presidents weighed in on the economy and when the central bank should start increasing interest rates.

Dallas Fed President Richard Fisher told CNBC he believes rates could start rising early in 2015 if the economic data keep coming in stronger.

Read MoreRates could rise 'early next year': Fed's Fisher

Meanwhile, in a statement before the jobs report, Philadelphia Fed President Charles Plosser said central bank policy is inconsistent with "clear progress" made by the U.S. economy this year.

Read MoreFed policy 'inappropriate' given progress: Plosser

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