Latest / Best of Business / Liam Dann: NZ Herald Business Editor on the unemployment rate rising to 5.6% in June

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Liam Dann: NZ Herald Business Editor on the unemployment rate rising to 5.6% in June · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: New unemployment data is worse than economists were expecting, but
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  Speaker 2: only mildly. Stats n ZI figures show the unemployment rate
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  Speaker 2: has increased again, up from five point three percent in
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  Speaker 2: March to five point six percent in the June quarter.
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  Speaker 2: To talk us through at New Zealand Herald Business editor
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  Speaker 2: at largely M. Dan is with us. Now, very good
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  Speaker 2: morning to you.
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  Speaker 3: Morning carry so he yeah, wish us turning up with
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  Speaker 3: some good yees you. Well, one day, Roberto, surely one.
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  Speaker 2: Day will bad news Dan, that's what you are becoming.
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  Speaker 2: But is this the last of the bad news?
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  Speaker 3: Well, possibly not on this unemployment thing, because it is
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  Speaker 3: that it is that you know, we say this all
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  Speaker 3: the time. It's the last piece of the puzzle to
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  Speaker 3: turn in an economic recovery, and we aren't nearly as
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  Speaker 3: far along the economic recovery path as we'd like to
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  Speaker 3: be because of all the horrible things that happened with
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  Speaker 3: them in the world, with the oil prices and whatnot.
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  Speaker 3: So I think there are some economists saying it could
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  Speaker 3: it won't improve for another couple of quarters could well,
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  Speaker 3: you know, I've seen forecasts for it coming up to
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  Speaker 3: five point seven and hanging around at relatively high levels
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  Speaker 3: next year, so into next year. I mean, I look,
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  Speaker 3: and that's why I've sort of been I've written recently
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  Speaker 3: that I don't think the economy economic recovery is going
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  Speaker 3: to come along in time for the election, and not
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  Speaker 3: not in a meaningful way that people, you know, can
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  Speaker 3: respond to. There might be a bit of green shoots
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  Speaker 3: stata here and there, but yeah, this is this is
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  Speaker 3: worse than expected.
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  Speaker 2: It's I mean, it affecting well.
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  Speaker 3: Certainly young people are copying it, and as ye so,
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  Speaker 3: and Auckland is copying it, Auckland and Northland. Northland's up
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  Speaker 3: at eight point eight percent unemployment rate, and of course
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  Speaker 3: that will be much higher if you dig into the
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  Speaker 3: youth unemployment up there museum. Auckland's unemployment rate is six
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  Speaker 3: point five, which is all so a very high headline
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  Speaker 3: figure when you consider that you can find the you know,
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  Speaker 3: an ethnic breakdown and all those things. You can find
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  Speaker 3: much higher levels below the surface. And you know, it
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  Speaker 3: always requires a bit of explanation. But the underutilization rate,
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  Speaker 3: which is when we throw in particularly in this modern world,
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  Speaker 3: people who work contracts or two part time jobs and
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  Speaker 3: all that sort of stuff that might not qualify as
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  Speaker 3: full time but would so they're working a bit they'd like,
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  Speaker 3: so they're not officially unemployed, but they might not be
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  Speaker 3: doing very well. They need more hours, and they're saying
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  Speaker 3: they're underutilized.
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  Speaker 2: What about the Yeah, underutilized is a really good measure.
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  Speaker 2: What about the people who don't get the doll because
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  Speaker 2: their partner owns too much? Are they classified as looking
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  Speaker 2: for work or underutilized?
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  Speaker 3: This isn't a measure they could be in this this survey,
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  Speaker 3: because this isn't the same as the measure of who's
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  Speaker 3: on the benefit. This is a survey that goes out
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  Speaker 3: and says, you know, to be unemployed, you have to
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  Speaker 3: be actively looking for work and have none including you know,
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  Speaker 3: like if you have one hour of part time work,
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  Speaker 3: you're not officially unemployed. So it's ridiculous. Yeah, well, I
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  Speaker 3: mean that's why we treat the underutilization. You know that
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  Speaker 3: that's quite a serious a measure, or a good measure,
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  Speaker 3: even though it's not as snappy and easy to understand
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  Speaker 3: as unemployment. Because we've talked about unemployment for thirty or
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  Speaker 3: forty years, but I think I think it has changed.
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  Speaker 3: You know, there's so many people do work contracts and
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  Speaker 3: you know, different part time jobs and different hustles and
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  Speaker 3: all that sort of stuff that you know, I think
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  Speaker 3: underutilization is probably a better measure to look at. And
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  Speaker 3: you know, look, you're looking at that being at levels
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  Speaker 3: we haven't seen since twenty thirteen, So was that coming
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  Speaker 3: out of the christ Church quakes.
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  Speaker 2: It's pretty pretty grim, it is, So what where do
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  Speaker 2: we go from here?
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  Speaker 3: Well, you know, hopefully hopefully, you know, you just got
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  Speaker 3: to look at the rest of the world and say, well,
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  Speaker 3: he is hoping they get a resolution. You've got to
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  Speaker 3: all back down into the seventies. Today I've said, I
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  Speaker 3: don't think today. Yeah, for today, I mean, you'd have
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  Speaker 3: to be there's a lot of cry wolf stuff going
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  Speaker 3: on there, right and you'd have to be an enormous
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  Speaker 3: optimist to think it's suddenly going to be resolved with
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  Speaker 3: whatever deal the US is talking about overnight. So it
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  Speaker 3: looks to me like it's sort of a two steps forward,
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  Speaker 3: one step back. There'll be tension there for a while,
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  Speaker 3: and at some point I would hope that we sort
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  Speaker 3: of detach a bit from this that we kind of
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  Speaker 3: get on with things, like in a weird sort of way.
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  Speaker 3: I sympathize with what the Prime Minister was perhaps trying
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  Speaker 3: to say on stage and wrote, but well, look I
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  Speaker 3: wouldn't I probably hopefully would have said it differently. I
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  Speaker 3: think I.
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  Speaker 2: Know, I know what he meant. If you've got a
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  Speaker 2: broad understanding of yeah, and.
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  Speaker 3: Just I would use I would use a sporting analogy.
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  Speaker 3: In the World Cup finals, we've just all been paying
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  Speaker 3: attention to the teams that got ahead by one or
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  Speaker 3: two goals and then just hung on and tried to
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  Speaker 3: hang on. They tended to lose, and so oh that's nice.
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  Speaker 3: That hanging on mentality is not great, especially for business.
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  Speaker 2: And perhaps it could be a speech writer as a
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  Speaker 2: prime minister.
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  Speaker 3: Yeah, No, I don't think so. Wellington's too cold. Yeah,
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  Speaker 3: but it's it's a case that yeah, we unfortunately, and
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  Speaker 3: I actually think in hindsight that survived or twenty five
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  Speaker 3: thing was a terrible.
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  Speaker 2: Terrible because everybody was waiting for something in Magic Court
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  Speaker 2: and we.
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  Speaker 3: Made a few jokes about what rhyme is of twenty
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  Speaker 3: six and now in twenty seven, I'm like, no, no,
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  Speaker 3: we're not. You know, you just will be in heaven
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  Speaker 3: seven standing around telling people that the puts the government
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  Speaker 3: in a very different difficult position, but standing around telling
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  Speaker 3: people on the recovery is looking good for next year.
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  Speaker 3: Now if you look at the economists forecast, it kind
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  Speaker 3: of is.
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  Speaker 2: But that would be such a swizz if labor got
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  Speaker 2: back in and then benefited from an improved economy. That
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  Speaker 2: would be so unfair.
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  Speaker 3: Yeah, well, I mean that that would be that would
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  Speaker 3: oh no, and it might some might argue be a
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  Speaker 3: bit early for that to happen. I mean, historically we've
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  Speaker 3: not you know, it's very rare to change.
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  Speaker 2: After I did after one.
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  Speaker 3: Look came through it three times in the last century,
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  Speaker 3: so that you know.
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  Speaker 2: That would know. But that would just be plain wrong
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  Speaker 2: if Hopkins came back. But also, you know how they'd
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  Speaker 2: solve the unemployment problem. They're just re hiring the government department.
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  Speaker 3: It would probably be good news for Wellington in the
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  Speaker 3: short term, but I think, yeah, look, and I don't
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  Speaker 3: know what it would do to the property market and things.
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  Speaker 3: Auckland is clearly a real standout in terms of the
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  Speaker 3: problem with this economy. We've we've been through We've just
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  Speaker 3: been through the whole cycle.
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  Speaker 2: Everyone, Charlie.
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  Speaker 3: Monkey boom, you know, dairy prices booming, meat prices booming.
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  Speaker 3: That used to be the formula that solved a lot
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  Speaker 3: of New Zealand's economic problems, and here we are interest
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  Speaker 3: rates going up again and there was no recovery. We
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  Speaker 3: missed it.
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  Speaker 2: How much of that is to do with the lockdowns
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  Speaker 2: or is that, as Chris hap Coin said, you know,
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  Speaker 2: only zb's interested in that now.
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  Speaker 3: I don't know. Yeah, I think you can certainly look
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  Speaker 3: at the big debt levels and that sort of stuff
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  Speaker 3: and say, well, you know, there are some structural issues
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  Speaker 3: with how much we borrowed, how much stimulus was done,
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  Speaker 3: and then maybe that we because of that, our inflation
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  Speaker 3: went a bit higher and we had to slam on
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  Speaker 3: the brakes harder. But yeah, I mean it almost becomes
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  Speaker 3: behavioral at some point. I mean, all the world is suffering,
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  Speaker 3: and you know you're going to hear Nikola Willis and
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  Speaker 3: people talk about that's true, you know the realities of
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  Speaker 3: the global situation, and they're right, But then it does
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  Speaker 3: feel like we're just kind of doing it a bit harder.
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  Speaker 2: And you know, they were not lockdown and they're booming.
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  Speaker 3: Yeah, yeah, and it also you know, the timing has
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  Speaker 3: been quite good for them in terms of you know,
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  Speaker 3: all the earthquake rebuild coming to Fruition and you know,
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  Speaker 3: again getting myself into trouble here. I am a Cantabrian,
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  Speaker 3: always will be, even though I've been up here thirty years.
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  Speaker 3: But christ Church is a very very big provincial town.
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  Speaker 3: In some respects it's a city, but it is also
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  Speaker 3: a service center for a large agricultural economy, and so
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  Speaker 3: it does fit with the you know, the they're getting
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  Speaker 3: more benefit. They have a big amp show and all
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  Speaker 3: that stuff. You know, it's it's certainly more urbane than
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  Speaker 3: you know than just that, but you know, it does
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  Speaker 3: does have that connection to the agricultural economy which Auckland's lacking.
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  Speaker 3: Auckland's lacking pretty much a property sector at the moment.
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  Speaker 3: You know, it's just been flat to backwards. And you know,
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  Speaker 3: I've had this debate with people about the wealth effect,
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  Speaker 3: but I'm more convinced than ever that you know, Auckland
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  Speaker 3: do respond to their house prices going up. And whether
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  Speaker 3: that's that that may well be a bad thing, but
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  Speaker 3: that's what we've become accustomed to and so you know
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  Speaker 3: that's what's missing. Consumers in Auckland are very feeling, very
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  Speaker 3: very cautious, and that's all flowing through to hospitality and
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  Speaker 3: business and all the rest of it. And turning it
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  Speaker 3: around is not easy. We don't want to go back
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  Speaker 3: to a sort of a you know, to go back
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  Speaker 3: to your led zeppelin, you know, just immigration.
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  Speaker 2: Well, I'm kind of I would give cutos to the
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  Speaker 2: government for not pulling that lever and using that sugar hit.
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  Speaker 3: So they are making us grind it out in a
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  Speaker 3: way that is probably structurally good for the economy. Agreed.
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  Speaker 3: It's extending the pain longer you can use you know,
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  Speaker 3: the analogy of you know, the hard work you do
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  Speaker 3: in the gym and all that sort of stuff. Unfortunately,
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  Speaker 3: for them, as we've sort of mentioned it, it looks
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  Speaker 3: like it's going to extend it out past November seven,
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  Speaker 3: so they've got some selling to do around. You know,
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  Speaker 3: I would say take the vision bigger and broader and
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  Speaker 3: ciculate that.
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  Speaker 2: And so you should be the speech rainer for the
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  Speaker 2: Prime minister. Here we go, Thank you very much, Liam Dan.
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  Speaker 2: Liam Dan, New Zealand Herald Business Editor at Large talking
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  Speaker 2: the unemployment data out today, up from five point three
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  Speaker 2: percent in March to five point six percent in the
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  Speaker 2: Dune quarters.
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  Speaker 1: For more from News Talks ed B, listen live on
• 10:27
  Speaker 1: air or online, and keep our shows with you wherever
• 10:30
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