Latest / Best of Business / Jarrod Kerr: Kiwibank chief economist on employment numbers holding steady in latest report

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Jarrod Kerr: Kiwibank chief economist on employment numbers holding steady in latest report · Best of Business

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  Speaker 2: Good afternoon. We have some good news on the employment front.
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  Speaker 2: Despite expectations that the unemployment rate would go up, but
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  Speaker 2: it's actually come and unchanged for the first three months
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  Speaker 2: of the year at five point one percent. Jared Kurtis
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  Speaker 2: Kiwibank's chief economist, Aye, Jared.
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  Speaker 3: Hey, how are you very well?
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  Speaker 2: Thank you? So can we put this down to people
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  Speaker 2: not losing their jobs, but just taking fewer hours instead.
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  Speaker 3: Yes, exactly, that's the main message. It's great that people
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  Speaker 3: aren't losing their jobs. That total hours worked is down
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  Speaker 3: three percent over the year, so that's quite a contraction.
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  Speaker 2: I see that we have about twenty one percent of
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  Speaker 2: the people who are in the workforce actually in part
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  Speaker 2: time work. Does that seem like a high number to you?
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  Speaker 3: Yeah, it is. We've seen part time work increasing as
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  Speaker 3: full time work is decreasing. So businesses are clearly cutting
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  Speaker 3: hours to reduce costs and fight their way through what's
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  Speaker 3: quite an awkward period. And that's weighing on households, and
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  Speaker 3: some households are struggling.
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  Speaker 2: Can we just assume that the hours will go up
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  Speaker 2: again as the economy picks up.
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  Speaker 3: Yeah, and we really do need to see the economy
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  Speaker 3: bounce back, and we think that happens over the second
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  Speaker 3: half the year and into next year. So things will
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  Speaker 3: get better, but it does take time and it will
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  Speaker 3: take time for the labor market to strengthen.
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  Speaker 2: Do you think that this is the height of what
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  Speaker 2: we were going to reach? Like, it's not going to
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  Speaker 2: go up later. We haven't delayed it.
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  Speaker 3: This is it we're hoping that's the case. I mean,
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  Speaker 3: our forecast was for an unemployment rate to reach about
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  Speaker 3: five point three five point four. Sitting at five point
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  Speaker 3: one is obviously better than that, but it is a
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  Speaker 3: big glyft from the three point two where we're at
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  Speaker 3: it a year or so ago. If we peak this year,
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  Speaker 3: then I think we'll see the unemployment rate falling over
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  Speaker 3: twenty twenty six, which will be good news for many.
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  Speaker 2: So how do you think this is going to affect
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  Speaker 2: the Reserve Bank decision on the OCR later in the month.
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  Speaker 3: Look, we are sitting here having been through a deep recession,
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  Speaker 3: with a rising unemployment rate, falling hours, these all these indicators,
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  Speaker 3: and the Reserve Bank still has interest rates at restrictive levels.
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  Speaker 3: They're still restraining the economy. It's not needed. They should
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  Speaker 3: be cutting aggressively. Two and a half. We're at three
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  Speaker 3: and a half at the moment we were at five
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  Speaker 3: and a half. We've had a decent move, but we've
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  Speaker 3: got to get below three percent, which is the believed
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  Speaker 3: neutral rate.
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  Speaker 2: Jared is good to talk to you. Thank you so much,
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  Speaker 2: Jared Kerchief Economist a Kiwibank.
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