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Brad Olsen: Infometrics Principal Economist on unemployment rising less than expected · The SME Stream

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  Speaker 1: Unemployments risen from four point six percent to four point
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  Speaker 1: eight percent in the September quarter. This is slightly below
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  Speaker 1: what we were all expecting, including the Reserve Bank and
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  Speaker 1: around five percent. Infometrics Principal economist Brad Olsen is with
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  Speaker 1: us now, Hey, Brad, good evening. Why is it coming
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  Speaker 1: less than expected? Is this because everybody's gone off to was?
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  Speaker 2: He not?
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  Speaker 1: Fully? But you're sort of on the right track.
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  Speaker 2: It's not actually because the labor market is in that
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  Speaker 2: great position are and it's sort of not all bad news.
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  Speaker 2: It's more that we've had a bunch of people that
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  Speaker 2: haven't become what we'd define as unemployed. So we saw
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  Speaker 2: around fourteen thousand fewer people in employment in the September quarter.
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  Speaker 2: Of those fourteen thousand fewer in jobs, only five thousand
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  Speaker 2: were counted as an increase in unemployment. So the remaining
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  Speaker 2: nine thousand or so got into what we call the
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  Speaker 2: not in labor force group, So, for various reasons, are
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  Speaker 2: either not looking for work, they can't find work, they're
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  Speaker 2: not available to start immediately. So although their unemployment number
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  Speaker 2: not quite as high as we might have expected, realistically,
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  Speaker 2: still a lot of challenges out there. Still a difficult
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  Speaker 2: labor market, and looking through the numbers you are starting
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  Speaker 2: to see over the last year definitely more discouragement where
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  Speaker 2: people are not able to find jobs and therefore they're
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  Speaker 2: not looking quite as much.
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  Speaker 1: Now, how is this going to affect the OCR decision?
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  Speaker 1: Does this totally scrap any hope of a seventy five
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  Speaker 1: basis point cut?
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  Speaker 2: I don't know if it scraps any hope, but it
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  Speaker 2: sure puts the dabner on it pretty significantly. Not only that,
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  Speaker 2: but we also saw that when we got the labor
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  Speaker 2: cost data that came out, it didn't drop by quite
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  Speaker 2: as much as was expected either. Part of that because
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  Speaker 2: those public sector pay increases still quite substantial. We had
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  Speaker 2: the new police agreement that came into force in the
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  Speaker 2: September quarter. But long story short, I think what it
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  Speaker 2: probably does is that there was a lot of other
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  Speaker 2: pretty weak economic data that's come out over the last
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  Speaker 2: couple of months in similar this labor market data itself
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  Speaker 2: maybe not quite as bad as expected. So fifty still
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  Speaker 2: very much firmly on the table in pole position, but
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  Speaker 2: year right, probably not quite as much expectation now for
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  Speaker 2: that seventy five. It's just not as bad enough to
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  Speaker 2: sort of pulled that fire alarm.
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  Speaker 1: Yet, I thank you very much, Brad really appreciate it.
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  Speaker 1: Bred Awsoon Informetric CEO and principal economists