TD Securities said July payrolls undershot expectations, with total employment up 23k and earlier months revised down by 103k. The unemployment rate fell to 4.1%, alongside a dip in labour-force participation. Beneath the headline, private payrolls rose 30k, while government employment fell 53k, with local government education a key drag after recent volatility.
Retail Sales Outlook
The firm expects July retail sales to slip 0.2% m/m after a 0.2% rise in June, which would mark the first decline since January. It sees weakness led by autos and petrol, while control-group sales are expected to be flat, partly reflecting a normalisation after Amazon Prime Day.
Federal Reserve Implications and Economy Activity
TD Securities argued the payrolls report is unlikely to shift the Fed’s stance, keeping inflation data in focus after two consecutive supply shocks, and it pointed to mixed but expansionary ISM readings and robust Q2 underlying GDP growth as evidence that activity remains steady.
