FXTRADING Economic Data Summary (Asia-Pacific | 08/06)

New Zealand Labor Market Remains Resilient

New Zealands second-quarter employment data came in stronger than market expectations, showing that although the labor market has cooled, overall labor demand remains supported. Data showed that employment increased 0.5% quarter-on-quarter, significantly above the market expectation of 0.1%; the quarterly Labor Cost Index accelerated from 0.5% to 0.7%, indicating that wage pressures remain relatively strong. However, the unemployment rate also rose from 5.3% in the first quarter to 5.6%, above the market forecast of 5.4%, reaching the highest level since September 2015.

A closer look at the details shows that the rise in unemployment was mainly driven by an expansion in labor supply rather than a sharp deterioration in employment demand. The labor force participation rate increased from 70.4% to 70.7%, while employment grew 1.2% year-on-year. Private sector wages rose 0.7% quarter-on-quarter, indicating that domestic inflation pressures remain present.FXTRADING analysis believes that New Zealand‘s labor market continues to show resilience, with strong hiring activity and wage growth supporting the Reserve Bank of New Zealand’s tightening bias, although the rise in unemployment suggests that future policy adjustments will require greater caution.

Australias Services Sector Recovers

Economic activity in Australia improved significantly at the start of the third quarter, with the services sector becoming the main driver of growth. According to S&P Global data, the services PMI rose from 50.5 in June to 53.6 in July, reaching a six-month high; the composite PMI increased from 50.4 to 53.2, marking the strongest improvement since January this year. At the same time, manufacturing expanded for the first time in six months, indicating that the economic recovery is spreading beyond a single sector.

The recovery in demand helped improve business activity, with new orders ending a four-month decline and domestic demand becoming the main source of support. However, export orders remained in contraction, suggesting that external conditions are still relatively weak. Meanwhile, although input cost growth slowed, businesses began raising selling prices, reflecting that pressure on profit margins has not been fully resolved. FXTRADING analysis believes that Australias economy has improved in the short term, with services sector recovery and stronger business confidence providing growth support, but inflation pressures and weak external demand remain key factors influencing future policy decisions.

US Labor Market Shows Clear Signs of Cooling

Private-sector hiring in the United States slowed significantly in July, with the ADP employment report showing that private payrolls increased by only 44,000, below the market expectation of 75,000 and lower than the revised 95,000 increase in June. The services sector added 47,000 jobs, while goods-producing industries lost 3,000 positions, bringing overall employment growth down to one of the weakest levels in recent months.

Despite weak job creation, the wage market maintained some resilience. Annual wage growth for workers who remained in their current jobs stayed at 4.4%, while wage growth for job changers increased to 7.0%, the highest level since August 2025, indicating that labor competition pressures remain in some sectors. FXTRADING analysis believes that the US labor market is gradually cooling, but persistent wage growth continues to limit the pace of inflation decline. The Federal Reserve will need to balance changes in employment conditions with ongoing inflation pressures when determining future policy direction.

Japans Economy Continues to Expand

Japans economic activity continued to expand in July, although services sector growth slowed. According to S&P Global data, the services PMI declined from 52.2 in June to 51.2 in July, remaining in expansion territory for the second consecutive month. Business activity, new contract growth, and promotional demand continued to provide support, but some companies reported that underlying market demand remained relatively weak.

Improvement in manufacturing effectively offset the slowdown in services, with manufacturing output rising to the highest level since early 2014. This helped the composite PMI edge down only slightly from 52.8 to 52.7, indicating that overall economic expansion remained stable. FXTRADING analysis believes that Japan‘s economic recovery is continuing, with manufacturing improvement providing support for growth, but slower services activity and persistent price pressures are increasing uncertainty surrounding the Bank of Japan’s policy adjustments.