Latest / Best of Business / Michael Gordon: Westpac senior economist on the unemployment rate rising to 5.2 percent

Transcript

Michael Gordon: Westpac senior economist on the unemployment rate rising to 5.2 percent · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk ZEDB. Follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:17
  Speaker 1: Heather Duplessy Allen make it.
• 0:18
  Speaker 2: Twelve past five. The unemployment rate has risen to five
• 0:21
  Speaker 2: point two percent now. That is the highest rate since
• 0:23
  Speaker 2: late twenty twenty. Not as bad as expected though, we
• 0:26
  Speaker 2: were picking five point three. Michael Gordon is Westpac senior
• 0:29
  Speaker 2: economist and with us, Hey, Michael, do you reckon this
• 0:33
  Speaker 2: is the worst we're going to see or are we
• 0:34
  Speaker 2: going to go further from here?
• 0:36
  Speaker 3: I think we're getting near the end, not necessarily there yet.
• 0:41
  Speaker 3: This has really been I guess, a continuation of the
• 0:44
  Speaker 3: slowdown in the economy that's been running for a couple
• 0:46
  Speaker 3: of years now, and we don't know that was really
• 0:50
  Speaker 3: not not unsurprising given that we had the Reserve Bank
• 0:54
  Speaker 3: raising interest rates to try and bring inflation under control.
• 0:58
  Speaker 3: So we're just seeing this very delayed impact that's still
• 1:00
  Speaker 3: coming through in the jobs market. I think we are
• 1:04
  Speaker 3: getting towards the end. We have seen economic activity picking up,
• 1:07
  Speaker 3: but it's just not coming through in terms of businesses
• 1:09
  Speaker 3: need to hire just yet.
• 1:11
  Speaker 2: Are we being saved by the underutilization rate here?
• 1:16
  Speaker 3: Not really the underutilization rate as a broader measure, and
• 1:21
  Speaker 3: therefore you end up with the higher number. Some people
• 1:24
  Speaker 3: do like to pick it out because it is a
• 1:26
  Speaker 3: higher number, but when it comes down to it, it
• 1:29
  Speaker 3: is telling us much the same story as the unemployment
• 1:32
  Speaker 3: rate itself. They're both back to around where they were
• 1:36
  Speaker 3: in twenty sixteen.
• 1:37
  Speaker 2: Now, what do you expect we're going to get it
• 1:39
  Speaker 2: as a result of this, with the Reserve Bank still
• 1:42
  Speaker 2: seeing a.
• 1:42
  Speaker 3: Cut, Well, this looked to be pretty much right on
• 1:46
  Speaker 3: what they were expecting, so I don't think it's new
• 1:48
  Speaker 3: information for them. So I think really coming back to
• 1:52
  Speaker 3: what their existing thinking was, and I think the sense
• 1:54
  Speaker 3: from their last statement was that they were looking at
• 1:58
  Speaker 3: a cut probably in August. Some of them wanted to
• 2:02
  Speaker 3: last time, wanted to wait and see how the inflation
• 2:03
  Speaker 3: numbers and so one turned out. But I think it's
• 2:06
  Speaker 3: a pretty strong expectation we'll cut this time. What they
• 2:09
  Speaker 3: signal beyond that, I think would be more interesting. Do
• 2:12
  Speaker 3: they signal that there's a strong chance of another cut
• 2:15
  Speaker 3: or two by the end of the year, or they
• 2:17
  Speaker 3: just leave that there as an option.
• 2:19
  Speaker 2: Yeah, good stuff, Michael, Thanks very much. Michael Gordon Westpac
• 2:21
  Speaker 2: Senior Economists.
• 2:23
  Speaker 1: For more from News Talk st B, listen live on
• 2:26
  Speaker 1: air or online, and keep our shows with you wherever
• 2:29
  Speaker 1: you go with our podcasts on iHeartRadio