November 5, 2021
Good morning,
Happy Friday and welcome to payrolls day – October payrolls increased by 531k vs 450 expected. With favorable revisions to back months, today’s data could only be interpreted as strong and a comfortable beat. The market focus from taper to rate rise makes the underlying wage data more important than it has been in recent months. The wage data this month (below the headline payrolls number) was a bit better than in-line, showing gains of .4% on the month and 4.9% on the year.
The participation rate dropped a tick to 61.6% and the unemployment rate remained at 4.6%. In sum, good data for the markets (bonds and stocks) but not too strong as to possibly alter Chair Powell’s recent posture on any near term rate change.
Post Payrolls, pre-open – Futures are up another 50bps adding to the +2% gain already this week. The streak grows – now at 15 for 17 – and overbought signals are starting to flash. Is this anxiety provoking? Yes, melt-up like behavior always is. Hope you have a nice marathon weekend.
Be well,
Mike