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Michael Gordon: Westpac Senior Economist on the unemployment rate holding steady at 5.1% · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Unemployment five point one percent for quarter one, which is
• 0:02
  Speaker 1: the same as the quarter before it. No news is
• 0:05
  Speaker 1: good news because all the economists and the RBNZ for
• 0:07
  Speaker 1: that matter, thought it to go higher than that. Speaking
• 0:10
  Speaker 1: of they released their financial stability report yesterday. No major surprises.
• 0:15
  Speaker 1: We're basically banking on ocr cuts and the price of
• 0:18
  Speaker 1: milk and meat to get us out of the hole.
• 0:20
  Speaker 1: Banks are making a profit, which I know, despite what
• 0:24
  Speaker 1: you think, is a good thing, and should things really
• 0:27
  Speaker 1: hit the fan with the tariffs, they've got cash to
• 0:29
  Speaker 1: keep us going. We's PAC senior economist Michael Gordon with
• 0:32
  Speaker 1: me this morning. Michael, good morning, Good morning. Interesting that
• 0:36
  Speaker 1: split between full time and part time on the unemployment.
• 0:40
  Speaker 2: Yeah, I think it's one of the ways that the
• 0:43
  Speaker 2: the labor market does flex when you have a downturn,
• 0:46
  Speaker 2: so to the extent that people are sort of using
• 0:49
  Speaker 2: reduced hours as an alternative to lay off. It's one
• 0:52
  Speaker 2: factor why the unemployment rate has risen, But I don't
• 0:55
  Speaker 2: think it's really risen quite as high as as some
• 0:57
  Speaker 2: of the people were forecasting.
• 0:59
  Speaker 1: Yeah, so what do you do you think that that
• 1:01
  Speaker 1: is literally the reason that people have switched to part time.
• 1:05
  Speaker 2: It does seem to be one of the responses. It's
• 1:08
  Speaker 2: I mean, we're sort of seeing growth in the number
• 1:11
  Speaker 2: of part time workers. It's not because of hiring, I
• 1:13
  Speaker 2: don't think, but it is. There's the useful indication in
• 1:18
  Speaker 2: terms of where we go from here. I think as
• 1:20
  Speaker 2: things pick up, businesses are going to be able to
• 1:22
  Speaker 2: get a bit more out of their existing workers before
• 1:24
  Speaker 2: they need to start hiring again. So I think that's
• 1:26
  Speaker 2: why we're seeing the job ads, for instance, I still
• 1:30
  Speaker 2: pretty low at the moment. Business is not really under
• 1:32
  Speaker 2: pressure to hire at this stage.
• 1:33
  Speaker 1: Do you does this change your opinion of when it
• 1:36
  Speaker 1: might peak unemployment?
• 1:38
  Speaker 2: Yeah, a little bit. I mean I think we are
• 1:41
  Speaker 2: getting around the peak here. There's always a little bit
• 1:45
  Speaker 2: of wiggle room around the numbers from quarter to quarter.
• 1:47
  Speaker 2: But bear in mind we are coming out of a
• 1:50
  Speaker 2: couple of years where the Reserve Bank was really happy
• 1:52
  Speaker 2: to put the brakes on the economy to deal with
• 1:54
  Speaker 2: this quite serious inflation problem, and that's already changed in
• 1:58
  Speaker 2: the last nine months also, so while it usually takes
• 2:02
  Speaker 2: some time for the ship to turn around, there is
• 2:05
  Speaker 2: reason to think that the job situation in the year
• 2:08
  Speaker 2: ahead should look better than it was from the last
• 2:11
  Speaker 2: or the previous year or so.
• 2:12
  Speaker 1: We had the RBNZ Financial Stability Report out yesterday. What
• 2:15
  Speaker 1: did you make of it?
• 2:19
  Speaker 2: I think there was a there was a little bit
• 2:20
  Speaker 2: of focus on their comments on the tariff effects. Obviously
• 2:25
  Speaker 2: that sort of early stages, but it's not really something
• 2:28
  Speaker 2: that's that's sort of directed at the monetary policy implications
• 2:31
  Speaker 2: for this, and of course it is still early stages.
• 2:34
  Speaker 2: We've got the Reserve backed actual monetary policy statement coming
• 2:39
  Speaker 2: later this month. They'll probably have a bit more thinking
• 2:40
  Speaker 2: about what this might mean for interest rates here, and
• 2:43
  Speaker 2: it's it is a tricky one because we're New Zealand's
• 2:46
  Speaker 2: sort of not really directly in the firing line in
• 2:49
  Speaker 2: the way that the US Central bankers they're going to
• 2:52
  Speaker 2: be sort of meant announcing later this morning, and they're
• 2:55
  Speaker 2: kind of dealing with this fact that it's going to
• 2:58
  Speaker 2: actually be quite an inflationary effort in the US. At least.
• 3:01
  Speaker 1: Appreciate your time, Wiz Pack Senior economist Michael Gordon, Michael,
• 3:04
  Speaker 1: good to have you on the show. As always. For
• 3:07
  Speaker 1: more from Early Edition with Ryan Bridge, listen live to
• 3:10
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• 3:13
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