Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on what the new unemployment figures mean for economic recovery

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Brad Olsen: Infometrics Principal Economist on what the new unemployment figures mean for economic recovery · Best of Business

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  Speaker 2: Unemployment has reached a ten year high of five point
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  Speaker 2: four percent, up from five point three. This takes us
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  Speaker 2: back to a level we haven't been at since September
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  Speaker 2: twenty fifteen. But it's not all bad. Informetrics are seeing
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  Speaker 2: some good under that hood, and the chief executive, Brad
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  Speaker 2: Olsen is with us. Now, Hi, Brad, good evening. What
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  Speaker 2: are the numbers that you like here?
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  Speaker 3: Well, the biggest one for us is the fact that
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  Speaker 3: employment rowse a fairly strong point five percent in the quarter,
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  Speaker 3: so we did actually see more jobs activity. The reason
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  Speaker 3: that that unemployment rate also increased, though, is because participation
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  Speaker 3: rose from seventy point three to seventy point five. What
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  Speaker 3: that means is there's a whole bunch of people who
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  Speaker 3: previously they weren't counted as unemployed because they were out
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  Speaker 3: of the labor force. They weren't looking for work, they
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  Speaker 3: weren't available. Now there are a few more jobs starting
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  Speaker 3: to come around. They are making themselves available to get
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  Speaker 3: back into work, but they're now counted as unemployed whereas
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  Speaker 3: they weren't before, which has lifted that number so effectively
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  Speaker 3: you are starting to see a bit more of an
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  Speaker 3: improvement in that job's trend. It's just the meaning that
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  Speaker 3: you've both got more people who are looking for jobs
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  Speaker 3: as well as those who are actually getting them.
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  Speaker 2: Now a lot of the jobs that have been added
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  Speaker 2: appear to be part time jobs. Is that a sign
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  Speaker 2: that employers are just sort of dipping their toes but
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  Speaker 2: not fully confident yet.
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  Speaker 3: Yeah, it does seem to be part of that. I
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  Speaker 3: mean fifty five percent, so just over half of the
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  Speaker 3: new jobs we saw in the quarter were part time roles,
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  Speaker 3: and it does suggest that. Look, when you look at
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  Speaker 3: the number of hours being offered out there, it's not
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  Speaker 3: particularly strong yet and probably consistent with the fact that
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  Speaker 3: the job add numbers, the number of roles being advertised
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  Speaker 3: hasn't really jumped up strongly either, So there's a bit
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  Speaker 3: of a turn, but it's sort of not as forthright yet,
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  Speaker 3: which also comes in when you look at the underutilization rate,
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  Speaker 3: so slightly broader than unemployment. It looks at the number
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  Speaker 3: of people who don't have a job, those who have
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  Speaker 3: a job that would like to work more hours, and
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  Speaker 3: those who are not currently looking but they probably could
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  Speaker 3: be convinced into it. That rate was steady at thirteen percent,
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  Speaker 3: which does suggest you're sort of seeing people who weren't
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  Speaker 3: previously looking are now looking. Those who were looking already
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  Speaker 3: have maybe have got a job but on reduced hours,
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  Speaker 3: but they are looking for more. So some encouraging signs
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  Speaker 3: at least better than that five point four percent unemployment
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  Speaker 3: rate might suggest, but again not necessarily absolutely rapidly firing
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  Speaker 3: labor market momentum.
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  Speaker 2: You know, listen, just that business about the employers that
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  Speaker 2: are dipping their toes and not having full confidence to
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  Speaker 2: go full noise into full employment. What is going on
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  Speaker 2: here with our recovery. Why are we being as wobbly
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  Speaker 2: as we are at the start of this year.
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  Speaker 3: Well, I think it's possibly because we got burnt a
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  Speaker 3: bit with the expectations of recovery last year. You know,
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  Speaker 3: we talked about twenty five and about getting momentum back
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  Speaker 3: and it just didn't really get under weigh as much.
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  Speaker 3: And I think there's still a bit of a you know,
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  Speaker 3: circular thing here where for businesses they need to see
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  Speaker 3: stronger business sales coming through their front door before they
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  Speaker 3: commit to hiring more workers.
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  Speaker 2: But so, Brad, are we sizing up that RB governor
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  Speaker 2: before we're sure of what she's about?
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  Speaker 3: Well, a little potentially, but I suspect we're probably more
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  Speaker 3: sizing up that uncomfortable inflation to start with, Like probably
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  Speaker 3: no matter who the governor would be, three point one
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  Speaker 3: percent inflation does sort of set the catamacs of pigeons
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  Speaker 3: a little bit. You saw what the Reserve Bank of
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  Speaker 3: Australia had to do yesterday in terms of lifting rates.
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  Speaker 3: But I think probably all of this boils down for
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  Speaker 3: households that they're seeing that you know, inflation figure coming up.
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  Speaker 3: They're still uncertain about their job prospects, and that means
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  Speaker 3: that people are still acting fairly cautious. So until that
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  Speaker 3: turns around. We did see a little bit more data
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  Speaker 3: showing consumer confidence has bounced a bit higher, but I
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  Speaker 3: still think people are a little bit shy, a little
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  Speaker 3: bit cautious so far, and that's extending to businesses and
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  Speaker 3: they're hiring too.
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  Speaker 2: It's good to talk to you, Brad. As always, Thank you,
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  Speaker 2: Brad Elson, CEO of Informetrics.
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