The monthly nonfarm payrolls report was released this morning and the results were solid as the impact of the coronavirus delta variant to the economy continues to dissipate. Payrolls increased by 531k in October, moderately above consensus market expectations of 450k, with upward revisions in the prior periods. Trend growth in payrolls remains robust with a three-month moving average of 442k, although the trend is slowing with the prior months three month moving average at 629k. The unemployment rate ticked lower by two tenths of a percent, to 4.6%, however the participation rate remained unchanged at 61.6% on a month over month basis. Market participants are closely following the participation rate; an increase in the participation rate would be viewed as consistent with a “transitory” narrative on the longer-term inflation outlook and more of the population entered the labor force; today’s data did not provide the market with any additional visibility on the topic. Wage pressures remain evident in the data, with average hourly earnings dropping two tenths of a percent on a month over month basis, but increased three tenths of a percent, to 4.9%, on a year over year basis. Economic releases earlier in the week were also consistent with a recovering economy narrative, as the ISM Manufacturing Index came in at 60.8 and the ISM Services Index materially surprised to the upside at 66.7, both very comfortably in expansion territory.