Latest / Best of Business / Jarrod Kerr: Kiwibank Chief Economist on the unemployment rate reaching 4.6 percent

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Jarrod Kerr: Kiwibank Chief Economist on the unemployment rate reaching 4.6 percent · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks be follow
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  Speaker 1: together do to see al The.
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  Speaker 2: Unemployment rate has risen to four point six. It's slightly
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  Speaker 2: better than most forecasters had predicted. At four point seven.
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  Speaker 2: It's bang in line with the Reserve Banks for forecast.
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  Speaker 2: Jared kurz Kiwi Banks chief economist. Hey, Jared, Hey, right,
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  Speaker 2: this is this has hit the young ones particularly hard,
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  Speaker 2: as it always does, doesn't it.
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  Speaker 3: Yeah, it has. We've seen a list of unemployment and
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  Speaker 3: unfortunately it's the younger people who have been hit first.
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  Speaker 2: Wage inflation though still going up. That's a good thing
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  Speaker 2: for people, isn't it.
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  Speaker 1: Yeah it is.
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  Speaker 3: But then if you ask them, you know, are you
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  Speaker 3: working enough? Saying no, we want more hours. So the
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  Speaker 3: under utilization rate rose. So people are working, but they're
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  Speaker 3: just not getting the hours they want. How much longer
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  Speaker 3: that's a reflection Sorry.
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  Speaker 1: No, carry on.
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  Speaker 3: I was just going to say, and that's a reflection
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  Speaker 3: of you know, firms cutting hours rather than heads at
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  Speaker 3: the stage.
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  Speaker 2: Yeah, I mean, we are not where near where we're
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  Speaker 2: going with the unemployment rate. So how much longer have
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  Speaker 2: we got for this thing to kind of play out.
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  Speaker 3: Oh, we've got another year. The unemployment rate does lag.
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  Speaker 3: What's happening in the economy. Businesses do hold on to
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  Speaker 3: workers for as long as they can. So we think
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  Speaker 3: the unemployment rate keeps lifting for the rest of this
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  Speaker 3: year and into next, and it'll end up around five
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  Speaker 3: point two five point three percent.
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  Speaker 2: What do you think this means for the decision next
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  Speaker 2: week on the official cash rate?
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  Speaker 3: Look, I recommend this central bank cut rates next week.
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  Speaker 3: And I say that because we've seen enough in the
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  Speaker 3: data to be confident that inflation's not only going to
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  Speaker 3: be below three percent this year, but it'll be back
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  Speaker 3: to two percent next year. And when they set policy today,
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  Speaker 3: they're actually setting policy for the end of next year.
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  Speaker 3: That's how long it takes to feed through. So cut
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  Speaker 3: now for relief next year, Jared.
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  Speaker 2: What about the immediate reaction though? I mean, at the
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  Speaker 2: minute that they can't, people are going to feel freer
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  Speaker 2: and start to spend. It might not be massive, but
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  Speaker 2: it will change our attitudes, right, So could it potentially
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  Speaker 2: fire up the inflation just to weave it?
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  Speaker 3: Oh a little bit? And I think that's kind of
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  Speaker 3: what we want. The economy has been in recession for
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  Speaker 3: nearly two years. I think it is time to try
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  Speaker 3: and lift people's heads. I think it is time to
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  Speaker 3: try and boost confidence, get people investing, get people looking
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  Speaker 3: for growth again. You know, businesses are shell shocked and
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  Speaker 3: they keep saying that they're trying to survive until twenty five.
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  Speaker 3: And I don't like that mindset. I want people lifting
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  Speaker 3: their heads again and looking for growth.
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  Speaker 2: Yeah, Jared, listen, Thank you very much. Always appreciated, Jared Kirkie,
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  Speaker 2: we Banks Chief Economists.
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