Hiring is expected to have picked up at a solid pace and wages likely continued to climb in October, as Covid receded and the economy improved.

Economists expect 450,000 jobs were added last month, up from just 194,000 in September, according to Dow Jones. The unemployment rate is expected to fall to 4.7% from 4.8%. Hourly wages are expected to have risen 0.4% in October for a year-over-year gain of 4.9%. That’s up from a pace of about 4.6% in September.

“We think a big constraint or headwind causing some of the slowdown we’ve seen in recent months was Covid-related, and now it seems the cases and hospitalizations are trending in the right direction,” said Bank of America U.S. economist Alex Lin. He expects restaurants, hotels and retailers to be among those businesses adding workers in big numbers.

Following this week’s Federal Reserve meeting, economists are closely watching the wage component of the report, which has been showing elevated gains for months. The Fed said Wednesday it continues to view inflation as transitory. Economists say if inflation remains hot or gets even hotter, there’s a scenario in which the central bank could move swiftly toward raising interest rates. Currently, the futures market is pricing in the first Fed rate hike for July.

Bank of America expects 450,000 payrolls were added in October and forecasts the hiring pace will remain at a higher clip for a while, now that growth is expected to improve. In the third quarter, gross domestic product grew at a sluggish 2% rate. The median forecast is for 5% growth in the fourth quarter, according to CNBC Rapid Update.

“We are generally expecting stronger payroll readings going forward,” Lin said. “We’re expecting 600,000 (jobs per month) in the first quarter, 400,000 for the second quarter, and then it moderates back to more normal readings like 200,000.”

Diane Swonk, chief economist at Grant Thornton, expects the October payrolls to be much stronger than consensus at 650,000. She said not only could inflation and wages be issues for the Fed, but several months of consistently strong payroll numbers could change the central bank’s outlook.

“By December, they’ll have two more months of employment data, and I wouldn’t be surprised in December or January that the Fed accelerates tapering if we have two more months of strong jobs reports. They left the window open for a reason,” she said.

When economists look at Fed policy, the two most important economic inputs they watch are employment and inflation. Full employment and stable prices are the central bank’s dual mandate.

The Fed Wednesday said it would begin tapering its bond purchases by $15 billion a month and wind down its pandemic-era quantitative easing program by the middle of next year. While the Fed says the end of the bond purchases is not a trigger for interest rate hikes, traders are betting rates could rise at least twice next year and three times the year after.

Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, said the Fed’s action this week puts the markets even more on high alert for inflation and economic data in general.

“It’s not on autopilot. They’re going to be more data dependent,” he said. “I think the market believes [inflation] is transitory, but not completely. I think most market participants believe inflation will move lower but certainly not to pre-pandemic levels.”

Grant Thornton’s Swonk said if the data signaled the Fed could accelerate tapering, the markets would conclude the central bank is also set to speed up plans to raise interest rates.

“The issue is an acceleration in tapering could shift their views. The Fed was slow on the uptake on tapering, in my view,” Swonk said. She expects inflation to crest in 2022. Swonk noted that Fed Chairman Jerome Powell said he would be “patient” about raising rates but not “hesitant” if inflation does run hot.

Michael Gapen, chief U.S. economist at Barclays, said he does not think the Fed will move off the course it set this week.

“I think the chance for action in terms of rates or tapering is pretty low, but he left the window open for the second half of next year,” he said. “I think he’s willing to let this play out a little more and for them that might be six months.”

The employment data, including the participation rate, would have to improve for months for the Fed to act, he noted. Gapen expects 450,000 jobs were added last month.

“That would be another signal the economy emerged from Q3 with some momentum. The spending data looked pretty good,” he said. “The pick-up in employment would say we’re over the hump from Covid softness in Q3, and we’ll get some payback in Q4, hopefully.”