Latest / Best of Business / Liam Dann: NZ Herald Business Editor on the unemployment rate remaining at 5.1%

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Liam Dann: NZ Herald Business Editor on the unemployment rate remaining at 5.1% · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed be
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  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: As you heard, New Zealand's unemployment rate has remained unchanged.
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  Speaker 2: Stat's new stats in Z figures show the rate was
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  Speaker 2: five point one percent in the March quarter, slightly below
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  Speaker 2: forecasts from bank economists. New Zealand Herald's business editor at
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  Speaker 2: Largely M. Dan joins me, Now, good morning, I Garry, Well,
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  Speaker 2: I suppose that's good good news. You know, I saw
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  Speaker 2: an article recently. Maybe I was googling or I was
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  Speaker 2: looking for something, but I found an article saying why
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  Speaker 2: do economists keep forecasting when they always get it wrong?
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  Speaker 3: Yeah, it's true. I've been grilled about it this a
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  Speaker 3: bit lately. They often get the trend or the general
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  Speaker 3: direction right, and they're quite quite good at forecasting scenarios.
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  Speaker 3: So if you look at their best case, worst case,
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  Speaker 3: in mid case scenario, it gives you an idea of
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  Speaker 3: where we're going. But if you look at the number
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  Speaker 3: that if you treat them as predictions, you're probably going
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  Speaker 3: to be disappointed. But then if you treat a weather
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  Speaker 3: forecast as a prediction, you might be in trouble too,
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  Speaker 3: So it gives us context, I guess as the answer.
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  Speaker 2: It gives people jobs and means that the unemployment rate
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  Speaker 2: doesn't go through the roof.
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  Speaker 3: Yeah, well, I mean, yeah, look, this is a surprise.
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  Speaker 3: The economists will be scratching their heads before they put
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  Speaker 3: a report out because I think, yeah, it does look
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  Speaker 3: like good news. It hasn't felt like good news in
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  Speaker 3: the economy for a few weeks. Well, if you know,
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  Speaker 3: like we had the bounce out of recession, and there
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  Speaker 3: was a hope at the start of this year that
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  Speaker 3: the recovery would keep rolling and gathering momentum, and then
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  Speaker 3: there's all the stuff with the tariffs and markets crashing,
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  Speaker 3: and so that really took the steam out. And you know,
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  Speaker 3: the feeling you get is that there's a lack of
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  Speaker 3: confidence in business and consumers, and that consumers aren't spending.
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  Speaker 3: Certainly when you took to retailers, they are really feel it,
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  Speaker 3: feeling the pinch.
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  Speaker 2: Didn't we see? You know, the mortgage areas are up,
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  Speaker 2: the liquidations, business liquidations are up. God, it's been grindy
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  Speaker 2: for such a long time, hasn't it.
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  Speaker 3: Yeah, well, that stuff tends to be at the end
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  Speaker 3: of the cycle. So you know that the worst stuff
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  Speaker 3: is sort of sort of like the darkest before the dawn,
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  Speaker 3: and that's usually the case with labor market too.
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  Speaker 2: And I feel like you've been saying that for years.
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  Speaker 3: Well, yeah, they do call it the dismal science. And
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  Speaker 3: then you know, the other problem is had we had
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  Speaker 3: an economic boom of sorts right in the middle of
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  Speaker 3: COVID when the government flushed all that money into the economy,
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  Speaker 3: but it was hard to enjoy because we had this
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  Speaker 3: shadow of this pandemic over us. So I don't think
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  Speaker 3: we sort of were able to enjoy that sort of
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  Speaker 3: economic boom. But you know, when you go back, there
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  Speaker 3: was something like out of the GFC. Once we came
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  Speaker 3: out of the GFC recessions, we had about ten years
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  Speaker 3: with no recessions.
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  Speaker 2: It was fun.
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  Speaker 3: Yeah, it was good.
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  Speaker 2: We'd like to get fun. I've only got so many,
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  Speaker 2: you know, days left on the planet. I would like
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  Speaker 2: to enjoy some of them.
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  Speaker 3: Well, I mean, we look at what's happened here. I think,
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  Speaker 3: you know, you can see some social trends sort of
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  Speaker 3: affecting the way the stats work.
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  Speaker 2: So what what can sorry can I how do we
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  Speaker 2: define unemployed?
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  Speaker 3: Yes, good questions. So you have to be absolutely doing
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  Speaker 3: no work whatsoever, but looking for.
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  Speaker 2: Work, so you're not unwell, you're not incapable of work.
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  Speaker 3: So it's different to the benefit benefit stats, the job
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  Speaker 3: seeker stats. This is you know, they're saying, are you
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  Speaker 3: completely and you have to you know, so that the
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  Speaker 3: bit we have to be if you work at one hour,
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  Speaker 3: you're not unemployed and you're underutilized. And that's that's where
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  Speaker 3: some of the weakness and the economy can sort of
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  Speaker 3: be masked if you just look at the unemployment.
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  Speaker 2: Do we do we count the underutilized?
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  Speaker 3: We absolutely do so, and and and the economists and
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  Speaker 3: the Reserve Bank and the Treasury and the government hopefully
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  Speaker 3: looking at all these stats. And there's a lot more
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  Speaker 3: in the starter than just that top line unemployment rate.
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  Speaker 3: And what it's showing is that the numbers of people
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  Speaker 3: in part time work increased a lot. And so it
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  Speaker 3: suggests that there's a lot of people out there who
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  Speaker 3: have got part time work that would like to be
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  Speaker 3: working more and just having to take part time work
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  Speaker 3: to get through. And I guess you can be on
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  Speaker 3: a benefit and earn a certain amount of money, So
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  Speaker 3: you could be on a benefit unemployment benefit. You're allowed
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  Speaker 3: to earn a certain amount of money part time and
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  Speaker 3: you won't be counted as unemployed in these stats, which
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  Speaker 3: is confusing. That is confusing, But you know, these stats
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  Speaker 3: are sort of a clean line back to nine ninety six,
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  Speaker 3: so we stick with them. But I would say it
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  Speaker 3: is important to if you're really doing some you know,
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  Speaker 3: serious analysis of the economy, to look beneath just that
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  Speaker 3: top line unemployment rate and look at the utilization the employment.
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  Speaker 3: And also they do the flip side, which is the
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  Speaker 3: employment rate, and that is the number of jobs created,
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  Speaker 3: and that was also flat or I think if I
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  Speaker 3: can find it slightly down possibly, you know, so we're
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  Speaker 3: not creating jobs in the economy at the moment. That
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  Speaker 3: is economy. It's yeah, it's good. You know, you see
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  Speaker 3: headlines about job losses all the time, so intuitively you'd
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  Speaker 3: think that the unemployment rate was rising, and so I
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  Speaker 3: suppose it's Look, it's a good thing. If it's five
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  Speaker 3: point one percent. Now, it may still be some way
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  Speaker 3: to go before it peaks, or we may be, you know,
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  Speaker 3: near peak, but perhaps it will be a slightly lower peak.
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  Speaker 3: It's also flatted a little bit, well quite a lot
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  Speaker 3: by the number of New Zealanders that have left the country.
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  Speaker 3: So if you couldn't find a job, you could stay
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  Speaker 3: in New Zealand and be on the doll or you
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  Speaker 3: could go to Australia. And we know that there's been
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  Speaker 3: record numbers departing and a lot of young key he's
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  Speaker 3: going to Australia And I mean one economist, an Australian
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  Speaker 3: economists from New US actually he said to me, well,
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  Speaker 3: he thought it would be the unemployment rate would be
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  Speaker 3: above six if we didn't have that high level of migration.
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  Speaker 2: So I remember that was it during the Key years
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  Speaker 2: where that was the first time I heard that too,
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  Speaker 2: that if people had stayed then we'd be in real stock.
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  Speaker 3: Yeah. Yeah, you kind of don't want them to leave either,
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  Speaker 3: because it sort of reduces the opportunity and the economy
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  Speaker 3: their consumers and it's not a great scenario. But yeah, look,
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  Speaker 3: all these things being equal, though they were, they were
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  Speaker 3: going to be factors regardless of where the actual unemployment
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  Speaker 3: rate landed. So this is stronger than expected and and
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  Speaker 3: it will give possibly give the Reserve Bank a little
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  Speaker 3: bit of pause for thought. I had thought they might
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  Speaker 3: have to do a fifty basis point cut in May
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  Speaker 3: because of all the lack of confidence and get ahead
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  Speaker 3: of the curve. Perhaps that's less likely now wage growth
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  Speaker 3: has continued to rise, not not hugely, but it's it's rising,
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  Speaker 3: so you know, there will be a little bit of
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  Speaker 3: concern about just making sure that inflation's under control. It's not,
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  Speaker 3: it's not roaring away, but it's what limits the Reserve
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  Speaker 3: Bank's ability to cut rates further.
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  Speaker 2: It was interesting seeing the story about the benefit sanctions
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  Speaker 2: yesterday whether that actually, you know, lead people to to
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  Speaker 2: seek employment rather than stay on the benefit. The MSD said, well,
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  Speaker 2: we can't confirm if the sanctions, if there's a correlation
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  Speaker 2: between the sanctions and and the unemployment rate. Certainly there
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  Speaker 2: have been more sanctions applied to those on the unemployment
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  Speaker 2: benefit than there has been before.
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  Speaker 3: I guess that is the theory, isn't it. You're going
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  Speaker 3: to you're going to work a bit harder to find
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  Speaker 3: a job if you're going to have your benefit cut.
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  Speaker 1: Yeah.
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  Speaker 3: I'm just I'm just looking at some of the first
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  Speaker 3: stuff coming in from the economists and ASP saying, look,
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  Speaker 3: it's it's still they still when they look under the hood,
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  Speaker 3: it's still a softening of the labor market because that
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  Speaker 3: employment growth isn't there. You know, it's it's it's it's
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  Speaker 3: by no means suddenly a great market, I guess is
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  Speaker 3: the way to look at it. But yeah, I would
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  Speaker 3: take some heart from that that maybe things aren't quite
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  Speaker 3: as gloomy as they've seen. I've sort of to think
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  Speaker 3: that it's very much confidence problem that we have, and
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  Speaker 3: it's not helped by the global affairs and all that
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  Speaker 3: sort of stuff. But I think we had something with
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  Speaker 3: John Key saying much the same yesterday that you know,
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  Speaker 3: New Zealand has lost that confidence to invest in the future,
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  Speaker 3: and so people are getting a break on their mortgage
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  Speaker 3: and they're putting it on keeping that money going back
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  Speaker 3: onto their mortgage, or they're saving it rather than spend it.
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  Speaker 3: Because all the conversations you have are people nervous about
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  Speaker 3: the future.
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  Speaker 2: And nervous about keeping their jobs, keeping their jobs.
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  Speaker 3: And it's not just the economic cycle. There's this whole
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  Speaker 3: airer of AI and technological change and that's sort of
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  Speaker 3: sweeping through. So there's a sort of feeling of insecurity
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  Speaker 3: and I think that doesn't encourage people to get out
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  Speaker 3: and spend, doesn't encourage businesses to invest, and that's a
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  Speaker 3: hard thing to turn around.
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  Speaker 2: I'm older than you, but and as you get older,
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  Speaker 2: you get more responsibilities, so that weighs more heavily on
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  Speaker 2: your shoulders. But I was just saying when I talked
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  Speaker 2: about India Pakistan, you know, I cannot recall our time
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  Speaker 2: and my life where it's been such sustained period of
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  Speaker 2: bad news domestically and internationally.
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  Speaker 3: Yeah, it's been, I.
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  Speaker 2: Mean the same way.
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  Speaker 3: Well, I was a child in the seventies around Vietnam
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  Speaker 3: War sort of stuff, and was pretty rough, but then
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  Speaker 3: the economy was better. And yeah, I just my benchmark
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  Speaker 3: becomes my grandparents, because of course they did it. Really
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  Speaker 3: they had the first First World War, is kids depression
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  Speaker 3: in the Second World War. So I hope we're doing
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  Speaker 3: better than that.
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  Speaker 2: But marginally, but certainly in my lifetime, even with the
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  Speaker 2: sheer market crash, I mean, I had no responsibilities, so yeah,
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  Speaker 2: you know, I didn't care.
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  Speaker 3: Yeah, but that's right. Yeah, And and I do take
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  Speaker 3: heart from the young people. Now I've got teenage kids
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  Speaker 3: and things. They're still barroling on through the world just
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  Speaker 3: and yeah, yeah, but and so I'm always trying to
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  Speaker 3: work out how much of my worries are a symptom
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  Speaker 3: of getting older and how much how much? But there
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  Speaker 3: are some serious you know serious there's some serious stuff
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  Speaker 3: happening in the world, and I I think that weighs
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  Speaker 3: on the domestic economy.
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  Speaker 2: Yeah, now, just quickly, as business editor at large, what
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  Speaker 2: do you make of this unpassing under urgency, the repeal
• 10:20
  Speaker 2: of the Equal Pay Amendment, which was itself passed under
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  Speaker 2: urgency back in twenty twenty.
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  Speaker 3: Well, I'm not much of a political expert on the
• 10:27
  Speaker 3: urgency side of it. I'll get myself in trouble probably,
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  Speaker 3: but I can see the logic because to some extent,
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  Speaker 3: I'm all for equal pay for eminent men, by the way,
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  Speaker 3: comparing occupation, and I think that it had got opened
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  Speaker 3: up to the point where you were going to have
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  Speaker 3: this endless litigation around you know, jobs that were entirely different.
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  Speaker 3: And yes, there are structural reasons why it's you know,
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  Speaker 3: there are historic reasons why more women are in early
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  Speaker 3: childcare and all that sort of things, and you know,
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  Speaker 3: we can address that, but you can't just you know,
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  Speaker 3: is there are market forces we have to listen to
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  Speaker 3: to some extent around employment as well. Otherwise we'll sort of,
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  Speaker 3: you know, if governments start picking and choosing and it
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  Speaker 3: becomes a sort of endless cycle.
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  Speaker 2: And the water boutism has never helpful, it's never resolved.
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  Speaker 2: I agree with I agree with what Brooke van Velden
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  Speaker 2: is saying. It's just the optics are going to look terrible.
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  Speaker 3: It's difficult to avoid the headline. Yes, you know, you're
• 11:26
  Speaker 3: everyone wants to see equal pay for equal work. I
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  Speaker 3: think that's just, you know, just common sense. But there
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  Speaker 3: are some structural issues with the way it was going,
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  Speaker 3: and I can understand why the governments had to make
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  Speaker 3: that move. I think politically they probably tried to do
• 11:39
  Speaker 3: it fast because they know the optics are bad. Get
• 11:43
  Speaker 3: it out the way the band Aid, have the three
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  Speaker 3: or four days of media attention, and hope that they
• 11:47
  Speaker 3: can move on to the next thing. Winston will probably
• 11:49
  Speaker 3: be dreaming up something to grab the headlines next week.
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  Speaker 2: Jobs jobs, jobs, People need work, Yeah, they really need work.
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  Speaker 2: You need to feel as though you were self determining,
• 12:01
  Speaker 2: unless you're barbecue Man and nature Boy are quite happy
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  Speaker 2: strolling doing their own thing. But most people need to
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  Speaker 2: feel valued and need to feel that they're contributed A.
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  Speaker 3: Big part of it, isn't it. You know, it's not
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  Speaker 3: just and it goes hand in hand with the with
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  Speaker 3: the money to survive, is actually the self esteem that
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  Speaker 3: comes with it, and that's yea.
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  Speaker 2: Yeah, Oh well, okay, so the economists probably won't be
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  Speaker 2: looking for jobs even though they got it wrong again.
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  Speaker 3: But now that's a new forecast to do exactly.
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  Speaker 2: Thank you very much, Liam Dan a New Zealand Herald
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  Speaker 2: Business editor at large.
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