TD Securities' macro team, led by Oscar Munoz, projects that the headline US Nonfarm Payrolls (NFP) will slow to 80,000 in June, with 55,000 jobs added in the private sector and 25,000 in government, signaling a return to breakeven job growth levels [1]. This moderation follows a period where four of the first five months of 2026 saw much stronger-than-expected job gains [1]. The analysts note that while job growth is cooling, it remains resilient, with recent strength coming from sectors outside healthcare, particularly trade, transportation, utilities, and leisure and hospitality [1]. However, they anticipate continued weakness in trade jobs and a moderation, though still robust, in leisure job gains for June [1].
TD Securities forecasts the US unemployment rate to edge down to 4.2% in June, attributing this partly to a likely decline in the labor force participation rate on an unrounded basis, as well as potential seasonal factors that could influence the unemployment level [1]. The team highlights that risks to their June forecast are mixed: payrolls could surprise to the upside, reflecting the increased hiring momentum seen earlier in the year, but there is also a possibility that positive seasonal effects in leisure and hospitality could reverse more than expected, which would weigh on headline job gains [1].
Given these labor market dynamics, TD Securities believes that the ongoing stabilization in employment will allow the Federal Reserve to maintain its current policy stance, with rate hikes only likely if there is clear evidence of accelerating job growth [1].
CONCLUSION
TD Securities anticipates a slowdown in US job growth for June, with the labor market showing signs of stabilization. This outlook suggests the Federal Reserve is likely to remain on hold, reducing immediate risks of further rate hikes unless job growth accelerates significantly.