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Brad Olsen: Infometrics Principal Economist on the fragile economic recovery · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Now, Brad Olsen, Infometric's principle e commnist is with us
• 0:02
  Speaker 1: this morning because Informetric's latest reports is a little bit
• 0:05
  Speaker 1: worried about the recovery. Brad, what's worrying you?
• 0:08
  Speaker 2: Yeah, I think the concern at the moment is that
• 0:11
  Speaker 2: the momentum behind the economic pickup that we keep talking
• 0:14
  Speaker 2: about just seems to not be there sort of as
• 0:17
  Speaker 2: full as we hope. Yes, we're expecting the economy to
• 0:20
  Speaker 2: pick up this year, but again we're just a bit cautious.
• 0:22
  Speaker 2: We said that last year, and I mean you just
• 0:24
  Speaker 2: noted the likes of business confidence yes high, but has
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  Speaker 2: pulled back a bit in recent times. You look at
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  Speaker 2: the number of job ads in the economy, they were
• 0:32
  Speaker 2: showing a bit of momentum last year, but again not
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  Speaker 2: sort of convincing. They dropped a bit in December. Spending
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  Speaker 2: activity from households, which you know, as interest rates were down,
• 0:43
  Speaker 2: you'll be expecting households to pick up their spending. Well,
• 0:46
  Speaker 2: it was up in November, but then fell back in December.
• 0:49
  Speaker 2: The big spend up before Christmas. So we're just a
• 0:52
  Speaker 2: little bit worried that looking at the numbers. It's not
• 0:54
  Speaker 2: that we're sort of seeing this full throated sort of
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  Speaker 2: growth coming through, and that just sort of sets a
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  Speaker 2: little bit of an uneasy tone for the year.
• 1:01
  Speaker 1: Where is that because we are a little burnt by
• 1:04
  Speaker 1: the false storm we had last year.
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  Speaker 3: Well, it's certainly part of our worry.
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  Speaker 2: And look, as economic forecast as we understand that as well,
• 1:12
  Speaker 2: we were the ones talking about this sort of pickup
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  Speaker 2: in twenty twenty five that didn't really materialize. And I
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  Speaker 2: think part of it is that, you know, households have
• 1:20
  Speaker 2: been through so much the last couple of years. They
• 1:23
  Speaker 2: are the ones that will need to drive, you know,
• 1:25
  Speaker 2: the economic recovery. They need to be letching onto those
• 1:28
  Speaker 2: lower interest rates and then starting to spend. But they
• 1:31
  Speaker 2: also need to be a bit more convinced that job
• 1:34
  Speaker 2: opportunities are starting to come through. Otherwise everyone goes into
• 1:38
  Speaker 2: their shell. And of course, with inflation starting to be
• 1:41
  Speaker 2: a little bit more intense than anyone had hoped or expected,
• 1:44
  Speaker 2: it all just sort of creates a set of conditions
• 1:47
  Speaker 2: where again we're still forecasting that things grow, We're still
• 1:50
  Speaker 2: confident that things pick up, but looking at the numbers,
• 1:53
  Speaker 2: we're not sort of as convinced as we might have
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  Speaker 2: felt say, a couple of months ago, and it really
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  Speaker 2: does sort of suggest that the numbers at the moment
• 2:01
  Speaker 2: are sort of we're lacking a bit of conviction that
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  Speaker 2: it's going to continue to come through, and so it
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  Speaker 2: is very much a cautious start to the year.
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  Speaker 1: What do you need to see, Brad to make you
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  Speaker 1: not cautious?
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  Speaker 3: Well, I think probably the same as households.
• 2:15
  Speaker 2: It will be some of those labor market indicators who
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  Speaker 2: will be wanting to see the likes of job numbers
• 2:21
  Speaker 2: start to push up a bit higher than number of
• 2:23
  Speaker 2: jobs being advertised start to rise as well. And I
• 2:26
  Speaker 2: think again we've got next week some more labor market
• 2:29
  Speaker 2: data about the unemployment rate.
• 2:31
  Speaker 3: We will be looking quite closely at that, just to
• 2:33
  Speaker 3: try and understand.
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  Speaker 2: The sort of momentum. We know that businesses themselves, Yes,
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  Speaker 2: you've knowned business confidence is high, but I think also
• 2:41
  Speaker 2: you haven't actually seen as much hiring as people might
• 2:44
  Speaker 2: have expected. Job add numbers are up sort of about
• 2:47
  Speaker 2: ten percent from a low of a year ago. Still,
• 2:50
  Speaker 2: though you're seeing three point five times more job applications
• 2:53
  Speaker 2: for every ad than pre pandemic, So people are still
• 2:57
  Speaker 2: a bit cautious about their hiring intentions, and look, if
• 3:00
  Speaker 2: you're out there and going, look, my mortgage rate is lower,
• 3:03
  Speaker 2: but I can't pay mortgage if I don't have a job.
• 3:05
  Speaker 2: So if I'm not confident there's another opportunity out there,
• 3:08
  Speaker 2: I'm still going to act pretty constrained. That's sort of
• 3:10
  Speaker 2: the level of caution we're worried about. That's what If
• 3:13
  Speaker 2: we can turn it around, we'll start to provide a
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  Speaker 2: bit more growth.
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  Speaker 1: All right, appreciate your time, Brad. Brad at Olson informtric's
• 3:19
  Speaker 1: chief executive and economists with us this morning.
• 3:22
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• 3:25
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• 3:29
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