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That stellar jobs report just gave the Fed clearance for takeoff to raise rates

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Goldilocks has re-entered the building!

The data in the July employment report were not only uniformly strong in their internal components, but the prior month's jobs data were revised upward, ruling out the risk of a recession in the near-term.

The headline number was 255,000 jobs added to nonfarm payrolls in July, which blew past expectations of 180,000, according to a consensus estimate by Thomson Reuters. The labor force participation rate also edged higher and the broader measure of underemployment, known as U-6, held at 9.7 percent. Average hourly earnings were up 0.3 percent, a slight acceleration, which is good news for consumer income and spending.

The so-called household survey, a separate measure that determines the official unemployment rate, showed the unemployment rate held at 4.9 percent and that more than 400,000 jobs were added last month — even stronger than the payrolls survey.

That suggests we may be in what's often called a "Goldilocks economy," when the economy is not too hot and not too cold — but just right.

Economists have hailed the report as unblemished, good news for all.

The recent strength in employment adds to the growing list of economic data that suggest the U.S. can weather the global economic storms raging around the world, from the persistent slowdowns in China and Japan, the post-Brexit volatility in Europe and weakness in other global economies.

And, the report just may give the Federal Reserve a reason to resume normalizing interest-rate policy.

With the dollar's rebound after the jobs report and the uptick in short-term interest rates, the markets are likely to "price back in" the chances of the Fed raising rates in both September and December.

One curious counterpoint: While job growth has averaged 190,000 in the last three months and 206,000 in the last 12 months, inflation, both in terms of wages and in broader measures, has remained quiescent.

The PCE Deflator, the Fed's preferred measure of inflation, advanced at a 1.6 percent rate, as of the latest GDP report. That remains below the Fed's 2-percent target.

With oil prices falling again and the dollar rallying, that could — or maybe even should — keep the Fed from moving.

However, consumer spending has been strong, employment has been strong and wages are growing acceptably.

With the Goldilocks economy back in vogue, the Fed has room to raise rates. The question now is that, if it does, will Goldilocks leave the building once again?

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.

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