Latest / Best of Business / Liam Dann: NZ Herald Business Editor on the unemployment rate reaching 5.2%

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Liam Dann: NZ Herald Business Editor on the unemployment rate reaching 5.2% · Best of Business

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  Speaker 1: You're listening to a podcast from News talks'd be follow
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  Speaker 2: As you've heard now breaking news, which some of you
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  Speaker 2: were outraged by. It's not breaking news. It was expected. Well,
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  Speaker 2: you know, the figures were expected, but it was Yeah. No,
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  Speaker 2: I suppose they have a point. If I'm going to
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  Speaker 2: grizzle about the shrieking alarm on the on the civil
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  Speaker 2: defense alert, perhaps they have a point about breaking news.
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  Speaker 1: Orr.
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  Speaker 2: We'll do developing news next time. What do you think, Helen? Anyway,
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  Speaker 2: the latest labor market data from Stats New Zealand shows
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  Speaker 2: our unemployment rates five point two percent. This compares with
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  Speaker 2: five point one in March twenty twenty five four point
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  Speaker 2: seven percent in the June twenty four quarter, slightly better
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  Speaker 2: than the five point three percent expected by the consensus
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  Speaker 2: of economists. New Zealand Herald Business editor at largely M
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  Speaker 2: Dan joins me now to discuss very good morning to you. Okay,
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  Speaker 2: how many people is that who are desperate?
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  Speaker 3: That was something like a one hundred and fifty eight
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  Speaker 3: thousand people who are unemployed now in the as of
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  Speaker 3: the June quarter. Anyway, it's probably worse since then compared
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  Speaker 3: to one hundred and fifty six thousand in the March quarter,
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  Speaker 3: it's a sixteen thousand more people officially unemployed.
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  Speaker 2: Right, I'm going to go, how do we define unemployment
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  Speaker 2: these days? Because it changes, doesn't it?
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  Speaker 3: No, No, this does not change.
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  Speaker 2: I thought it's different developing, No, not even developed.
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  Speaker 3: It's very specific and has been for a long time.
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  Speaker 3: So so nineteen eighty six was ok. Yeah, And that's
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  Speaker 3: why I like this measure better than looking at job seekers,
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  Speaker 3: which is the benefit numbers, and they change, that's Rightment
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  Speaker 3: governments are prone to changing the way they count beneficiaries.
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  Speaker 3: They're still interesting for numbers to look at. But unemployment
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  Speaker 3: is very specific. You have to be looking for work
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  Speaker 3: and have zero work, none.
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  Speaker 2: At all, so oh, that's right.
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  Speaker 3: And jobs seekers, yeah, the job seekers can be you
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  Speaker 3: can be on the benefit and work a few hours,
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  Speaker 3: for example. Yeah, so it doesn't doesn't.
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  Speaker 2: Right, Okay, so you've got zero work and you're looking
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  Speaker 2: for it.
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  Speaker 3: Yeah, that's why it's important for these numbers to also
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  Speaker 3: look at things like the underemployment rate, the under utilization rate.
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  Speaker 3: But yeah, look, I mean you know that the top line,
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  Speaker 3: the official unemployment rate it's slightly better than the economists expected.
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  Speaker 3: I've been reminded by our market skuy Jamie Gray that
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  Speaker 3: it's not actually better than the Reserve Bank was expecting.
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  Speaker 3: The Reserve Bank had five point two and some of
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  Speaker 3: the details beneath the hoods, so to speak, probably looking
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  Speaker 3: a little bit worse than the Reserve Bank expected. So
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  Speaker 3: if you're wondering what the Reserve Bank will be thinking,
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  Speaker 3: they'll be looking back at their own forecasts and they
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  Speaker 3: will still be seeing this is pretty pretty grim. The
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  Speaker 3: reason I think I feel like those of us up
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  Speaker 3: here in Auckland might have been thinking things were a
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  Speaker 3: bit worse is the Auckland numbers themselves are really horrible.
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  Speaker 3: So unemployment rate in Auckland is six point one percent,
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  Speaker 3: so that's you know, continued to rise more steadily than
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  Speaker 3: the rest of the country. I mean, we know we've
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  Speaker 3: talked about the export money coming in through dairy and
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  Speaker 3: all the rest, and that the southern regions are going stronger.
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  Speaker 3: I haven't seen numbers for Wellington because much it would
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  Speaker 3: be pretty rough too, But you know, anecdotally, I think
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  Speaker 3: we're pretty sure that Auckland and Wellington are the places
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  Speaker 3: really doing it. Toughest at the moment in the.
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  Speaker 2: SA is Wellington. Yeah, I suppose if you haven't seen them,
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  Speaker 2: you don't know, but it's Wellington reached rock bottom yet
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  Speaker 2: I will look.
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  Speaker 3: I'd definitely be having a look through. But you sort
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  Speaker 3: of they haven't highlighted them in the stats n ZE
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  Speaker 3: press release, which means that you now have to go
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  Speaker 3: through the Excel spreadsheet stiff to find the Wellington numbers.
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  Speaker 3: So but you know, I'm sure they will come through
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  Speaker 3: and there'll be people interested because it's you know, it
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  Speaker 3: is it is an economy of two halves at the moment,
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  Speaker 3: it really is. The you know, the rural regional sector
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  Speaker 3: is more buoyant. I know, things a bit more buoyant
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  Speaker 3: in christ Church, which is a decent sized city, but
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  Speaker 3: it still feeds off the rural economy to some extent.
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  Speaker 3: So you're not surprising sitting in Auckland that we might
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  Speaker 3: be thinking that things were going to be worse than this.
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  Speaker 2: See and this is not good news for the government.
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  Speaker 3: No, no, none of this is great news for the government.
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  Speaker 1: You know.
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  Speaker 3: And speaking again of you know, not to go on
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  Speaker 3: about breaking news, but you know, we do know, you know,
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  Speaker 3: the economists are pretty pretty good on this, that that
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  Speaker 3: unemployment rises towards the end of the economic cycle, the
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  Speaker 3: labor markets the last thing to turn. Now, what we've
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  Speaker 3: seen in the second quarter is the economy stalling a bit.
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  Speaker 3: People starting to wonder whether the recovery is really happening,
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  Speaker 3: and it just there's some concern. It's been voiced by
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  Speaker 3: economists like Miles Workmen at A and Z that some
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  Speaker 3: companies were hanging on, hanging on and there might be
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  Speaker 3: another wave of redundancies because they and so it's extending everything,
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  Speaker 3: and of course it's extending everything towards twenty twenty six,
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  Speaker 3: which is election year. And you bet your political capital
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  Speaker 3: on fixing the economy, then that's it's a tough sell.
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  Speaker 3: And you know there are still you know, when you
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  Speaker 3: step back, a lot of the economists, especially the Australian
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  Speaker 3: economists I speak to, they just look at New zealing. Ah,
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  Speaker 3: you come right, you'll be right. You know, dairy prices
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  Speaker 3: are good, interest rates are coming down, so you know,
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  Speaker 3: the foundations are still in place for a recovery for
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  Speaker 3: things to come right. But it's gee, it's taking longer
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  Speaker 3: than this government would have liked, that's for sure.
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  Speaker 2: Absolutely it is. And also, you know, when you I'll
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  Speaker 2: never forget the brutality of Adrian or say, oh, we
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  Speaker 2: need to engineer a recession to get things right. A
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  Speaker 2: recession is exactly this. People who are sending out CV
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  Speaker 2: after CV after CV, feeling sick that they're not even
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  Speaker 2: getting a response, feeling desolate with every every job application
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  Speaker 2: that doesn't get answered.
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  Speaker 3: Yeah, it was sort of saying the thing you shouldn't say.
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  Speaker 3: I think it's that, you know, the way our system works,
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  Speaker 3: you have to put rates up to get rid of inflation.
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  Speaker 3: You don't necessarily want it to be a recession, though,
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  Speaker 3: and you don't want it to fall down so hard
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  Speaker 3: that it doesn't can't get up and running again. And
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  Speaker 3: it is taking a long time for the lower interest
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  Speaker 3: rates to flow through. There's a lack of confidence out
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  Speaker 3: there that's you know, just making it making people less
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  Speaker 3: likely to invest. We can sent the housing market, which
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  Speaker 3: is still flat installed. Yeah, so you know, I think
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  Speaker 3: I think we're still going to see a couple more
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  Speaker 3: interest rate cuts. At least I'm sure we're going to
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  Speaker 3: get one on August twenty. I don't think this is
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  Speaker 3: going to be, you know, seen as particularly upbeat by
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  Speaker 3: the Reserve Bank. You know, wage pressure is still coming off.
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  Speaker 3: That's another one of those things that economists can talk about,
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  Speaker 3: an upbeat terms or wage wage wage pressures being removed,
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  Speaker 3: so there's well that means you're not getting away as
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  Speaker 3: many as good a wage pay rise. But yeah, it
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  Speaker 3: does mean that if you are hanging in there for
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  Speaker 3: lower interest rates, we're probably heading in the right direction.
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  Speaker 2: There. God, when it takes off, is it going to
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  Speaker 2: take off with a hiss and a roar?
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  Speaker 3: Well, that's what concerns me.
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  Speaker 2: I mean if you don't want that either, do you think.
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  Speaker 3: I think we're looking at a cyclical recovery, which kind
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  Speaker 3: of means you get back to some sort of normal.
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  Speaker 3: It doesn't necessarily mean a boom. The economists have spoken
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  Speaker 3: to in the last week or two would say that
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  Speaker 3: because we fell so far, if it does come back,
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  Speaker 3: it could feel like a bit of a bit of
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  Speaker 3: a decent recovery. But that's what matters, and that's the
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  Speaker 3: trouble for the politics of it, and we've seen it.
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  Speaker 3: Some people say, with Joe Biden in the US and
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  Speaker 3: so on, that the economists can tell you that the
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  Speaker 3: numbers are looking good. So if by the end of
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  Speaker 3: the year start of next year, the numbers are starting
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  Speaker 3: to look good. That's fine, the economists can tell us that.
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  Speaker 3: But if we don't feel good, that doesn't really count,
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  Speaker 3: and it takes a bit longer to actually feel good.
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  Speaker 2: I was wondering that what makes us feel good? I
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  Speaker 2: think I was reading Simon Wilson's piece where he said,
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  Speaker 2: you know, if you've got equity in your home and
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  Speaker 2: you feel you can have a bit of reggle room
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  Speaker 2: and you can perhaps treat yourself to getting your teeth
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  Speaker 2: done overseas, that makes you feel rich.
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  Speaker 3: But yeah, rising house prices make New Zealanders feel good.
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  Speaker 3: A lot of New Zealanders, for better or for worse.
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  Speaker 3: It's just the way it is. It's where we've got
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  Speaker 3: a lot of our wealth tied up. So you know,
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  Speaker 3: when you see the value of your house going up
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  Speaker 3: one hundred or two hundred thousand dollars, you know it
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  Speaker 3: makes the equations on your own finances feel a lot better.
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  Speaker 3: I would hope that some people might be feeling better
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  Speaker 3: off because the key we saver and their savings are
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  Speaker 3: looking strong now that that's actually been going quite well.
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  Speaker 3: But that's not usually enough to make you feel comfortable
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  Speaker 3: if you haven't got job security. So this employment stuff
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  Speaker 3: is pretty crucial because if you are certainly of a
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  Speaker 3: certain age I include my age, and that you know,
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  Speaker 3: and you lose your job in your fifties, for example,
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  Speaker 3: there's a lot of people out there you know you've
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  Speaker 3: got or you've got you may have very specialist skills,
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  Speaker 3: and suddenly there isn't anywhere to go to earn anything
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  Speaker 3: like that money. You'll be in a long list of
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  Speaker 3: people trying to get a job at a supermarket. And
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  Speaker 3: so there are a lot of professional people feeling quite
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  Speaker 3: uncertain about it all. And it's not just the economic cycle.
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  Speaker 3: It's all this AI stuff. You know that the company's
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  Speaker 3: rationalizing and what they can do with computer technology. That
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  Speaker 3: adds a layer of insecurity as well. So that just
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  Speaker 3: makes people a little bit more cautious, and of course
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  Speaker 3: then they don't spend and then the retailers struggle, so
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  Speaker 3: you sort of have to cut through that too. I'm hopeful,
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  Speaker 3: I'm still hopeful that that that I think the cyclical recovery.
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  Speaker 3: I was particularly taken by speaking to some of the
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  Speaker 3: sort of big name Australian economists of been through the
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  Speaker 3: country in the last week. And it's that slightly patronizing
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  Speaker 3: tone that you get from from your Australian cousins or
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  Speaker 3: Australian friends sometimes, which is, oh, you guys, you know,
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  Speaker 3: we're a simple economy. You guys, are you all right?
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  Speaker 2: And they.
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  Speaker 3: Have a sense that we sort of do talk ourselves
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  Speaker 3: down a bit during especially in a groom gloomy winter,
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  Speaker 3: and that basically, you know, high commodity prices and low
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  Speaker 3: interest rates is just a recipe for New Zealand coming right,
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  Speaker 3: and it should be. It's just taking quite a while
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  Speaker 3: for the interest rates to the benefits to flow through completely,
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  Speaker 3: and quite a while for the commodity price stuff to
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  Speaker 3: reach the cities, obviously because partly because we've really got
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  Speaker 3: a property slump and we've got the construction sector not
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  Speaker 3: booming in the cities. Wellington's had the government cutbacks, and
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  Speaker 3: you've got to break through that level of sort of
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  Speaker 3: gloominess to get some momentum going.
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  Speaker 2: Okay. So I'm going to leave that with optimism that
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  Speaker 2: we're coming right.
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  Speaker 3: You got you gotta have a little bit of optimisty.
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  Speaker 2: Let's be like Ossie economists. You'll be right. Yeah, he's
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  Speaker 2: good commodities are good. Yeah, you'll be right, Thank you
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  Speaker 2: very much, Liam Dan, New Zealand Herald Business Editor at Large.
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