Latest / Early Edition with Ryan Bridge / Mark Smith: ASB Senior Economist on the unemployment rate due out today

Transcript

Mark Smith: ASB Senior Economist on the unemployment rate due out today · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Employment number out today, Reserve Bank expecting an increase from
• 0:04
  Speaker 1: five point one to five point two. That's equal to
• 0:07
  Speaker 1: peak lockdown numbers. Mark Smith is ASB Senior economists with
• 0:11
  Speaker 1: US Mark.
• 0:11
  Speaker 2: Good morning, Good morning, Ryan.
• 0:13
  Speaker 1: So you're siding with the Reserve Bank, right, Yeah.
• 0:17
  Speaker 2: We're at five point two, but it can easily be
• 0:20
  Speaker 2: higher than that.
• 0:21
  Speaker 1: Does it matter?
• 0:23
  Speaker 2: It does matter. What it really shows is that the
• 0:25
  Speaker 2: economy has gone through a very difficult period. So over
• 0:29
  Speaker 2: the last twelve months or so, the economy on net
• 0:32
  Speaker 2: has lost more than thirty thousand jobs. Now, a lot
• 0:35
  Speaker 2: of those job losses have been concentrated for the very young,
• 0:38
  Speaker 2: those just joining the labor force, and also for some
• 0:41
  Speaker 2: secrets like construction and the wider good sector. So yes,
• 0:44
  Speaker 2: it does matter for those people.
• 0:45
  Speaker 1: When do you see because the economists is split on
• 0:48
  Speaker 1: when it peaks. When do you think it will peak?
• 0:52
  Speaker 2: Yeah, that's a bigger knowing. There's a lot of fact
• 0:54
  Speaker 2: it's determining the numployment rate. Now we're hoping that that
• 0:57
  Speaker 2: freight will start moving low by the end of the year.
• 1:00
  Speaker 2: But what's been happening is recently with a lot of
• 1:02
  Speaker 2: trade disruptions and concerns about the economy, we'd actually see
• 1:07
  Speaker 2: firms hold back on hiring, and if anything, that unemployment
• 1:10
  Speaker 2: rate could get a little bit higher.
• 1:11
  Speaker 1: Still, we're still not even seeing job I mean we're
• 1:14
  Speaker 1: not that they have been increasing, but we're not seeing
• 1:16
  Speaker 1: job ads go boom yet, either, are we.
• 1:20
  Speaker 2: Yeah no, that's right. They are still well down on
• 1:22
  Speaker 2: where that were a while or so ago. Now we're
• 1:25
  Speaker 2: hoping to see the economy start to sort of sort
• 1:27
  Speaker 2: of ride itself towards in the year. But what could happen, though,
• 1:31
  Speaker 2: is if the economy remains weak for longer than than hoped,
• 1:35
  Speaker 2: we'd actually see the Reserve Bank revivable stimulus and what
• 1:38
  Speaker 2: they're previously indicated, if anything, the official cash rate at
• 1:42
  Speaker 2: full below three percent for the end of the year.
• 1:44
  Speaker 1: Yeah, yeah, I think you might be right there.
• 1:47
  Speaker 2: Now.
• 1:47
  Speaker 1: Supply demand obviously for labor effects the price you pay
• 1:50
  Speaker 1: for it, so don't expect the big pay rise this year.
• 1:53
  Speaker 2: Yeah, that's right. If anythink labor cost or roads, wage
• 1:56
  Speaker 2: growth will get the lowest in at least three years.
• 1:59
  Speaker 2: And what we were really thing is pretty sharp accelerations
• 2:02
  Speaker 2: and those and those wage increases. So the power, if
• 2:05
  Speaker 2: you like, the Biden power still from the favor employers,
• 2:09
  Speaker 2: and what they're doing is making you sure that you know,
• 2:11
  Speaker 2: with inflation falling, the need for wage increases, certainly not there.
• 2:16
  Speaker 1: Appreciate your thoughts. Mark Mark Smith ASB Senior Economists with
• 2:19
  Speaker 1: us this morning. For more from earlier edition with Ryan Bridge,
• 2:23
  Speaker 1: listen live to News Talks it'd be from five am weekdays,
• 2:27
  Speaker 1: or follow the podcast on iHeartRadio