5 in 5 with ANZ
Thursday: NZ Employment Rises
5 in 5 with ANZ
•February 4, 2026•9 min
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5 in 5 with ANZ•Feb 4, 2026
Why It Matters
Understanding the trajectory of New Zealand’s labor market is crucial for investors, businesses, and policymakers as it influences consumer spending, inflation trends, and interest‑rate decisions. The episode’s timely analysis helps listeners gauge economic momentum and anticipate potential shifts in monetary policy that could affect financial markets and borrowing costs.
Key Takeaways
- •US ADP jobs rose half expected, indicating soft hiring
- •NZ unemployment 5%; employment up 0.5% quarter
- •NZ underutilisation rate steady at 13%, limiting wage pressure
- •South Korea inflation hits 2% target, energy and food easing
- •RBI likely to defend rupee near 89‑90 as reserves thin
Pulse Analysis
The latest US labour data underscore a cooling hiring cycle. ADP private‑sector jobs rose at roughly half the forecast, while the ISM services index slipped to 53.8, suggesting layoffs remain limited but overall demand is subdued. Analysts warn that if the upcoming non‑farm payrolls echo this softness, the Federal Reserve may postpone its anticipated March rate cut. Across the Pacific, New Zealand’s unemployment edged up to 5 percent, yet quarterly employment rose 0.5 percent – the strongest gain since June 2023 – hinting at a tentative recovery in the domestic job market.
Central banks elsewhere are navigating similarly mixed signals. South Korea’s January CPI slowed to the 2 percent target, driven by lower energy and food prices, allowing the Bank of Korea to maintain a neutral stance. The European Central Bank is expected to hold its benchmark at 2 percent with a potential cut later in the year, while the Bank of England likely keeps rates at 3.75 percent before signalling future easing. In New Zealand, the under‑utilisation rate remains elevated at 13 percent, reinforcing the Reserve Bank’s view that wage pressures are unlikely to reignite inflation soon.
India’s trade outlook brightened after the United States agreed to reduce tariffs on Indian goods. ANZ now projects FY27 GDP growth of 6.8‑7 percent, up from earlier 6.5 percent estimates, and a current‑account deficit narrowing to 1‑1.3 percent of GDP. The rupee’s reaction has been modest, but the Reserve Bank of India is expected to step in around the 89‑90 cent level to shore up foreign‑exchange reserves, given recent large‑scale interventions. While equity outflows have persisted, the tariff relief offers a catalyst for cautious inflows, contingent on broader macro‑economic stability.
Episode Description
US hiring is weak in January, raising questions of whether a Fed rate cut in March could be on the cards; New Zealand’s unemployment rate rises, but there are positive signals; and the ECB and Bank of England are both expected to hold rates today amid cutting cycles.
In our Deep-Dive interview, ANZ Economist Dhiraj Nim analyses the implications for India’s economy from the deal to reduce US tariffs earlier this week.
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Show Notes
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