US Dollar: Labor data and confidence guide outlook – TD Securities

TD Securities strategists discuss several US indicators, expecting the June ISM Manufacturing index to edge down, while noting that JOLTS job openings remain elevated but likely overstated. They highlight cautious signals from labor market ratios and a weaker-than-expected June Consumer Confidence reading, emphasizing that labor conditions still feel difficult and projecting US payrolls to return to breakeven starting with June NFP.

Labor signals and confidence mixed

"We look for the June ISM manufacturing index to modestly reverse its May gain, falling to 53.7 (cons: 53.8). June's rapid decline in crude prices might influence responses regarding the outlook for the sector and inflation prospects."

"JOLTS job openings remained elevated for a second consecutive report, surprising expectations to the upside with a 7,594k print in May (TD: 6,900k, cons: 7,296k). We remain of the view that the JOLTS report is overstating openings, and should come back down next month given the signal from leading private sector indicators."

"Notably, consumers' assessment of the labor market resumed declining in the month. The labor differential (jobs plentiful less jobs hard to get) moved lower to 2.4 after being revised lower in May."

"While payrolls have been strong in 2026, the still-difficult nature of finding a job characterizes the strong start to the year as more stabilization rather an acceleration. We believe starting with June NFP that payrolls will move back to breakeven."

"June consumer confidence was weaker than expected, still improving, but to a lower level after downward revisions in May. The June index increased to 91.2 from 90.6 (TD: 94.0, cons: 94.4). The move higher was concentrated in expectations, probably due to consumers' hope for an Iran peace deal and lower gasoline prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)