Latest / Early Edition with Ryan Bridge / Mike Jones: BNZ Chief Economist on GDP figures released today

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Mike Jones: BNZ Chief Economist on GDP figures released today · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Back home GDP day today. Quarter two numbers do out
• 0:02
  Speaker 1: at ten forty five, most bank economists expecting a point
• 0:05
  Speaker 1: four drop, worse than the reserve reserve banks expected point three,
• 0:09
  Speaker 1: but optimism remains for a quarter three bounce back. Mike Jones,
• 0:12
  Speaker 1: B and Z Chief Economists, Morning, Mike, all right, you're
• 0:17
  Speaker 1: slightly more gloomy than the rest of the bank economists.
• 0:20
  Speaker 2: Why a sliver more gloomy. Yeah, half percent decline is
• 0:24
  Speaker 2: what we're picking, not too far from the condensus, but
• 0:28
  Speaker 2: you know, when we add up all the numbers, that's
• 0:30
  Speaker 2: what we get. I think it's pretty clear that the
• 0:33
  Speaker 2: economy fell into a bit of a pothole in the
• 0:35
  Speaker 2: second quarter. We'll just get out from this morning's numbers exactly.
• 0:39
  Speaker 1: How much, And obviously this is backwards looking. Do do
• 0:42
  Speaker 1: we expect quarter three will give us back what quarter
• 0:45
  Speaker 1: two taketh.
• 0:47
  Speaker 2: Largely? Yeah, we think this is probably the low point.
• 0:50
  Speaker 2: We've actually just lifted our FUKA for the third quarter.
• 0:53
  Speaker 2: The quarter announced its two point seven percent. We've got
• 0:57
  Speaker 2: a few lumpy factors in Q two we think will
• 0:59
  Speaker 2: come out and help us in the current quorder. Gortible
• 1:03
  Speaker 2: pictures stabilized a little bit we've had more rate caps,
• 1:05
  Speaker 2: so those things should help restore a bit of go forward.
• 1:09
  Speaker 1: How are you worrying other services set? The manufacturing numbers
• 1:13
  Speaker 1: that we've had.
• 1:15
  Speaker 2: Not what we would have liked or perhaps expected. I mean,
• 1:20
  Speaker 2: if you've sort of looked through the trend in those
• 1:22
  Speaker 2: PMI and PSI numbers, it is still positive, but kind
• 1:26
  Speaker 2: of barely. There's not a whole lot of momentum there.
• 1:30
  Speaker 2: But it does seem like, generally speaking, a step back.
• 1:33
  Speaker 2: The numbers are tilting in a positive direction, but looks
• 1:37
  Speaker 2: like it's just going to take a little more time
• 1:40
  Speaker 2: before we're kind of properly back up and been growing again.
• 1:44
  Speaker 1: The interesting piece on interest dot co us today is
• 1:46
  Speaker 1: saying that the December and March bumps that we saw
• 1:49
  Speaker 1: were more relief activity rather than the start of a
• 1:52
  Speaker 1: real recovery. Do you agree with that or do you
• 1:55
  Speaker 1: think that it was we were on the way and
• 1:57
  Speaker 1: then it was Trump and trade hitting sentiment and affecting everything.
• 2:04
  Speaker 2: Yeah, look, there's possibly a bit of that. I think
• 2:06
  Speaker 2: there was some genuine growth happening. It's a two steps forward,
• 2:12
  Speaker 2: one step back sort of growth pattern. I think the
• 2:17
  Speaker 2: growth outlooks just relatively fragile. It's stops start because we
• 2:21
  Speaker 2: don't have blowing in our favor some of those things
• 2:24
  Speaker 2: that often help us in a recovery, things like rising
• 2:27
  Speaker 2: house prices and booming migration, extra governments spending, that sort
• 2:31
  Speaker 2: of stuff. So without that stuff, I think we're going
• 2:34
  Speaker 2: to stay in this sort of choppy still a recovery,
• 2:36
  Speaker 2: but a choppy back and forth, stop start sort of environment.
• 2:40
  Speaker 1: Mike, the most important question on everyone's lips, especially Christopher
• 2:44
  Speaker 1: Luxon's when does your average household actually start to feel
• 2:48
  Speaker 1: like things are getting bit, like we're getting ahead.
• 2:52
  Speaker 2: Yeah, I mean, that's the big question I think for us.
• 2:56
  Speaker 2: When we look at the outlook it's going to we
• 3:00
  Speaker 2: think until probably that the final quarter of this year,
• 3:03
  Speaker 2: for example, so Q four before GDP is back up
• 3:07
  Speaker 2: to that high watermark of the start of last year,
• 3:10
  Speaker 2: and at that time we're going to start to see,
• 3:13
  Speaker 2: we think, the unemployment rate start to turn down. It's
• 3:16
  Speaker 2: going to take some time, but that's when we might
• 3:19
  Speaker 2: think the labor market will start to turn I think
• 3:21
  Speaker 2: that's probably when households will start to feel a little
• 3:25
  Speaker 2: more confident and better about the economy. But there's no
• 3:29
  Speaker 2: doubt it's going to be probably well into next year
• 3:33
  Speaker 2: before it actually kind of feels properly, properly like a recovery,
• 3:37
  Speaker 2: all right?
• 3:38
  Speaker 1: Might we live in hope? Thanks Mate and Mike Jones,
• 3:40
  Speaker 1: bean z Intief Economist.
• 3:42
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• 3:45
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• 3:48
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