FXTRADING Economic Data Summary (Asia-Pacific | 08/07)

US Labor Market Cools but Layoff Pressure Remains Limited

The US labor market continues to show signs of a gradual cooling trend, but overall conditions remain stable. In the week ended August 1, initial jobless claims increased by 1,000 to 199,000, below the market expectation of 203,000, while the previous figure was revised up to 198,000. The four-week moving average declined to 198,750, indicating that layoffs remain at relatively low levels.

For the week ended July 25, continuing jobless claims increased by 24,000 to 1.801 million, while the insured unemployment rate remained unchanged at 1.2%. Combined with the recent weakness in ADP employment and the ISM Services Employment Index, the data suggest that companies are slowing hiring but have not begun large-scale layoffs, with the labor market gradually moving into a low-hiring, low-layoff environment. FXTRADING analysis believes that although the US labor market is showing signs of slowing, jobless claims data indicate that companies still have a strong willingness to retain workers, suggesting the current adjustment remains moderate.

Eurozone Domestic Demand Recovery Remains Insufficient

Eurozone retail sales weakened in June, indicating that household demand recovery continues to face pressure. Data showed that eurozone retail sales fell 0.3% month-on-month, reversing the 0.4% increase in May, while overall EU retail sales declined 0.1% after rising 0.6% previously. On an annual basis, eurozone retail sales still increased by 0.7%, but consumer growth momentum remains limited.

From a sector perspective, sales of food, beverages and tobacco declined by 0.5% month-on-month, while non-food sales fell 0.4%. Only automotive fuel sales recorded growth, rising 1.5%. Germany, Finland and Romania recorded weaker performances, while retail activity improved in Portugal and Sweden, highlighting continued divergence in regional consumption recovery. FXTRADING analysis believes that although eurozone economic activity has shown some improvement, retail data indicate that household spending remains cautious. Weak domestic demand will continue to limit the pace of economic recovery and encourage the European Central Bank to maintain a patient policy approach.

UK Construction Sector Gradually Stabilizes

The UK construction sector showed signs of improvement in July, with the pace of decline slowing significantly. The S&P Global Construction PMI rose from 38.4 in June to 44.7, reaching a four-month high, but remained below the 50 expansion threshold, meaning the construction sector has stayed in contraction for 19 consecutive months.

By sector, the commercial construction activity index rose to 46.8, showing relatively stronger performance. The residential construction index stood at 41.8, with the pace of decline slowing to its weakest level since October 2025. The civil engineering index remained the weakest area at 38.3. However, the decline in new orders narrowed to the smallest since September 2025, while some companies reported increased market inquiries and tender opportunities. FXTRADING analysis believes that the UK construction sector is gradually moving away from its downturn. Although a return to expansion remains unlikely in the short term, improving orders and recovering confidence suggest the industry may be approaching a bottom.

Japans Wage Growth Continues

Japan‘s June wage data showed further improvement, providing additional support for the Bank of Japan’s policy normalization efforts. Real wages increased 1.6% year-on-year, matching the revised gain in May and marking the longest period of consecutive growth since 2021. Nominal cash earnings rose 3.4% year-on-year, remaining above 3% growth for the fifth consecutive month and marking the longest such streak in 34 years.

Wage growth was mainly driven by corporate pay increases and summer bonuses. Special earnings in June increased 3.5% year-on-year, while the average summer bonus exceeded 1 million yen for the first time, reaching the highest level since 1981. Meanwhile, data from the Japan Business Federation showed that average wage growth at large companies reached 5.37% this year, exceeding 5% for the third consecutive year. FXTRADING analysis believes that Japans wage growth is becoming more sustainable. The strengthening trend of corporate wage increases will further support improvements in consumption and reinforce the foundation for the Bank of Japan to continue adjusting its monetary policy.

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