TD Securities analysts anticipate a slowdown in February US Nonfarm Payrolls, projecting a print of 60,000 jobs, with private sector gains at 70,000 and government job losses at 10,000. This forecast is slightly above the consensus estimate of 55,000 jobs. The moderation in private payrolls is attributed to mean-reversion in healthcare and negative strike effects, particularly following a revision to the strike report by the Bureau of Labor Statistics, which confirmed the impact of the Kaiser Permanente strike at 31,000 jobs—much larger than initially reported. The Unemployment Rate is expected to remain steady at 4.3%, consistent with consensus, though TD Securities notes a higher likelihood of an increase to 4.4% than a decrease to 4.2%. Average Hourly Earnings are likely to have moderated to 0.2% month-over-month and 3.7% year-over-year [1].
In addition to payrolls, January Retail Sales are expected to rebound by 0.2% month-over-month after a flat reading at the end of 2025, with consensus at -0.3%. Strength in auto sales is anticipated to offset weak gasoline spending. The retail sales control group, which is used for official spending estimates, is also projected to improve by 0.2% month-over-month, though in real terms it likely remained stagnant (consensus: 0.3%) [1].
TD Securities expects these data releases to cause a modest bear flattening in US yields, as markets remain focused on geopolitics and incoming economic data. The stabilization in the labor market and the rebound in retail sales are seen as key factors steering the curve, with the overall market reaction expected to be moderate [1].
CONCLUSION
TD Securities forecasts a moderation in US job gains and a slight rebound in retail sales, with the labor market showing signs of stabilization. These developments are expected to result in a modest bear flattening of US yields, indicating a medium market impact as investors remain attentive to both economic data and geopolitical factors.