The August jobs report brought some good news — unemployment ticked down to 5.1%, hourly wages rose — along with the usual constellation of asterisks. Those will be hotly debated in the weeks ahead as the Fed mulls a rate hike. For another view of How We’re Doing, consider a new report from the Brookings Institution that examines the cleave and drift of the American upper middle class from the rest of the country. It will surely sound familiar, but the key here is the framing.

While the debate over inequality usually trains on the concentration of wealth among the super-rich, Brookings senior fellow Richard Reeves instead focuses the top fifth of American earners, a quintile he calls the upper middle class. He finds they too are accelerating their separation from everybody else, across a range of metrics: in income, yes, but also in educational attainment, family stability, comfort with change, and political participation. And Reeves argues these measures “appear to be clustering more tightly together, each thereby amplifying the effect of the other.”

The phenomenon could help explain what’s happening in the presidential race — specifically how Donald Trump, running as a human middle finger to the establishment, has managed to continually pad a lead that the political class is still shocked he secured in the first place. As Reeves notes, most of us in Washington — journalists, wonks, operatives — ourselves belong to that top quintile that’s ever more remote from the country we observe. So it’s perhaps no great surprise we didn’t foresee the appeal of a candidate who can proclaim to the other four-fifths that he’s seen how the system works and it’s just as rotten as they suspected. That failure to anticipate Trump’s rise should brace the Republican donor class now plotting to lay him low by tarring him as insufficiently conservative. It’s evidently a moveable standard, and Trump’s supporters may prefer his definition.

Top News

• Energy Secretary-cum-nuclear physicist was the ‘secret weapon’ to clinching the Iran nuclear deal

It has taken a concerted fight from congressional Democrats and the White House to beat back a fierce opposition from Republicans bent on thwarting the Iran nuclear deal. But for many Democratic lawmakers, Energy Secretary Ernest J. Moniz’s convincing explanation on the technology behind tracking radioactive traces, and exposing any subsequent deal-breaking from Iran, was a cincher in winning them over to vote for the historic agreement. The other key to solidifying their allegiance: Senior diplomats from Britain, China, France, Germany and Russia, who, one by one, said this deal would be as good as it gets. At last count, President Obama has the 34 votes he needs to sustain a veto  of a Republican effort to disapprove the deal.  New York Times

• The biggest loser of the summer so far is Scott Walker

"He can't seem to find his way on any given issue with a handheld GPS.” That was just one of many damning statements made by Republican insiders on party candidate Scott Walker, who has gone from favorite to after-thought faster than you can say “Tim Pawlenty." Walker’s key problem has been one of position – namely, that he has either too many, or none at all. “He's been on all three sides of every two-sided issue,” said an Iowa Republican. “For the last two months, he hasn't made a single policy pronouncement that he or his staff hasn't had to clarify or clear up within two hours.” His forgettable debate performance and inability to stand out in a crowd of more vocal candidates have conspired to push Walker further down the polls, a fall for a man who, with the support of the influential Koch brothers supposedly behind him, was expected to mount a stronger challenge.  Politico

• Jeb Bush has changed course by attacking Donald Trump

If you can’t beat ‘em, join ‘em. Faced with a teetering candidacy in the face of the avalanche of poll-driven support for Trump, the former Republican frontrunner has launched a series of attacks against the billionaire developer. A recent 80-second online video clip puts together a medley of Trump quotes that cast aspersions on his conservative credentials. And Bush used Spanish to call out Trump’s bully-tactics. But underneath all this new-found aggression is whether it will, well, work. Other candidates who have engaged in a similar reversal of tactics, such as South Carolina Sen. Lindsey Graham and Kentucky Sen. Rand Paul, have seen their numbers slide after much punching and name-calling. It may be, however, that faced with an alternative of holding back while Trump surges ahead in the polls, Bush may have no other options.  Fortune

Around the Water Cooler

• Donald Trump would have been far richer if he had just done nothing

Donald Trump’s financial record has been put under the microscope since his emergence as the frontrunner for the Republican presidential nomination. His business acumen has been much trumpeted – most of all, by Trump himself – but is it truly worthy of the top job in the land? Had the son of real estate tycoon Fred Trump reinvested his inheritance into a mutual fund of S&P 500 stocks in 1974, it would have been worth nearly $3 billion today. If he had taken the $200 million that he was deemed to have been worth in 1982 and done the same reinvestment, it would have swelled to around $8 billion today. That larger number exceeds reasonable estimates of his net worth, and could have prevented Trump from needless spending on real estate projects and four corporate bankruptcies. So far, Trump has spent around $1.4 million on his candidacy, and his potential war chest for the fight ahead could have been far bigger if he had chosen the stock market over scaffolding and skyscrapers.  National Journal

• Has David Petraeus inadvertently united ISIS and Al Qaeda?

The former CIA director is back in the headlines after a report that he was urging U.S. officials to consider moderate members of Al Qaeda’s Nusra front to fight ISIS in Syria. Jihadis have responded online with calls to reject Petraeus’ proposal, and that Nusra Front militants should unite behind ISIS. In several tweets, some have blamed Petraeus for intentionally trying to cause additional strife between the two camps, advocating instead that they should put aside differences and come together. This would mark a departure: Al Qaeda and the Islamic State have been in conflict since ISIS broke away from the former to form its own group.  Vocativ

• Kentucky county clerk Kim Davies is a Democrat. Does this matter? 

Social media was abuzz with the New York Times revelation that Kim Davies – the county clerk who is presently jailed for defying a Supreme Court ruling granting same-sex marriage licenses – was not a Republican, but a Democrat. The news has ignited a partisan back-and-forth. On one hand, Republican affiliates are pointing out the hypocrisy of Democratic circles that advocate for LGBT freedom in theory while denying the freedom of others in practice. But as a panel of historians attest in a Washington Post discussion, that factual tidbit tells us little about Davies’ true beliefs. Instead, her membership is rooted in a party that, during a bygone era, was plainly segregationist. The question of whether it matters is moot, the panel says; party dictums on supporting LGBT rights have clearly seen the Republicans adopt a present-day anti-gay stance, irrespective of Davies’ party allegiance.  Washington Post

Today's Fortune CEO Daily was produced with assistance from Jonathan Chew.