August 5, 2025 • 11 mins
Economic recovery is taking longer than many hoped.
Unemployment's risen to a five-year high of 5.2%, up from 5.1% in the March quarter.
New Zealand officially moved out of recession last year.
The Herald's Liam Dann told Kerre Woodham the job market is taking longer to catch up, so many people may not be feeling better off.
He says economists can tell us numbers are improving, but it takes longer for life to improve.
Dann says anxiety about job security and AI is having ripple effects across the economy.
He says a lot of professional people are uncertain about the future, and that's putting them off spending money.
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Episode Transcript
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Speaker 1 (00:09):
You're listening to a podcast from News talks'd be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
As you've heard now breaking news, which some of you
were outraged by. It's not breaking news. It was expected. Well,
you know, the figures were expected, but it was Yeah. No,
I suppose they have a point. If I'm going to
grizzle about the shrieking alarm on the on the civil
defense alert, perhaps they have a point about breaking news.
Speaker 1 (00:38):
Orr.
Speaker 2 (00:38):
We'll do developing news next time. What do you think, Helen? Anyway,
the latest labor market data from Stats New Zealand shows
our unemployment rates five point two percent. This compares with
five point one in March twenty twenty five four point
seven percent in the June twenty four quarter, slightly better
than the five point three percent expected by the consensus
(01:00):
of economists. New Zealand Herald Business editor at largely M
Dan joins me now to discuss very good morning to you. Okay,
how many people is that who are desperate?
Speaker 3 (01:10):
That was something like a one hundred and fifty eight
thousand people who are unemployed now in the as of
the June quarter. Anyway, it's probably worse since then compared
to one hundred and fifty six thousand in the March quarter,
it's a sixteen thousand more people officially unemployed.
Speaker 2 (01:28):
Right, I'm going to go, how do we define unemployment
these days? Because it changes, doesn't it?
Speaker 3 (01:33):
No, No, this does not change.
Speaker 2 (01:34):
I thought it's different developing, No, not even developed.
Speaker 3 (01:39):
It's very specific and has been for a long time.
So so nineteen eighty six was ok. Yeah, And that's
why I like this measure better than looking at job seekers,
which is the benefit numbers, and they change, that's Rightment
governments are prone to changing the way they count beneficiaries.
They're still interesting for numbers to look at. But unemployment
(02:00):
is very specific. You have to be looking for work
and have zero work, none.
Speaker 2 (02:06):
At all, so oh, that's right.
Speaker 3 (02:07):
And jobs seekers, yeah, the job seekers can be you
can be on the benefit and work a few hours,
for example. Yeah, so it doesn't doesn't.
Speaker 2 (02:16):
Right, Okay, so you've got zero work and you're looking
for it.
Speaker 3 (02:20):
Yeah, that's why it's important for these numbers to also
look at things like the underemployment rate, the under utilization rate.
But yeah, look, I mean you know that the top line,
the official unemployment rate it's slightly better than the economists expected.
I've been reminded by our market skuy Jamie Gray that
it's not actually better than the Reserve Bank was expecting.
(02:42):
The Reserve Bank had five point two and some of
the details beneath the hoods, so to speak, probably looking
a little bit worse than the Reserve Bank expected. So
if you're wondering what the Reserve Bank will be thinking,
they'll be looking back at their own forecasts and they
will still be seeing this is pretty pretty grim. The
reason I think I feel like those of us up
(03:03):
here in Auckland might have been thinking things were a
bit worse is the Auckland numbers themselves are really horrible.
So unemployment rate in Auckland is six point one percent,
so that's you know, continued to rise more steadily than
the rest of the country. I mean, we know we've
(03:23):
talked about the export money coming in through dairy and
all the rest, and that the southern regions are going stronger.
I haven't seen numbers for Wellington because much it would
be pretty rough too, But you know, anecdotally, I think
we're pretty sure that Auckland and Wellington are the places
really doing it. Toughest at the moment in the.
Speaker 2 (03:45):
SA is Wellington. Yeah, I suppose if you haven't seen them,
you don't know, but it's Wellington reached rock bottom yet
I will look.
Speaker 3 (03:51):
I'd definitely be having a look through. But you sort
of they haven't highlighted them in the stats n ZE
press release, which means that you now have to go
through the Excel spreadsheet stiff to find the Wellington numbers.
So but you know, I'm sure they will come through
and there'll be people interested because it's you know, it
is it is an economy of two halves at the moment,
it really is. The you know, the rural regional sector
(04:14):
is more buoyant. I know, things a bit more buoyant
in christ Church, which is a decent sized city, but
it still feeds off the rural economy to some extent.
So you're not surprising sitting in Auckland that we might
be thinking that things were going to be worse than this.
Speaker 2 (04:28):
See and this is not good news for the government.
Speaker 3 (04:31):
No, no, none of this is great news for the government.
Speaker 1 (04:34):
You know.
Speaker 3 (04:34):
And speaking again of you know, not to go on
about breaking news, but you know, we do know, you know,
the economists are pretty pretty good on this, that that
unemployment rises towards the end of the economic cycle, the
labor markets the last thing to turn. Now, what we've
seen in the second quarter is the economy stalling a bit.
(04:55):
People starting to wonder whether the recovery is really happening,
and it just there's some concern. It's been voiced by
economists like Miles Workmen at A and Z that some
companies were hanging on, hanging on and there might be
another wave of redundancies because they and so it's extending everything,
and of course it's extending everything towards twenty twenty six,
which is election year. And you bet your political capital
(05:19):
on fixing the economy, then that's it's a tough sell.
And you know there are still you know, when you
step back, a lot of the economists, especially the Australian
economists I speak to, they just look at New zealing. Ah,
you come right, you'll be right. You know, dairy prices
are good, interest rates are coming down, so you know,
the foundations are still in place for a recovery for
things to come right. But it's gee, it's taking longer
(05:42):
than this government would have liked, that's for sure.
Speaker 2 (05:44):
Absolutely it is. And also, you know, when you I'll
never forget the brutality of Adrian or say, oh, we
need to engineer a recession to get things right. A
recession is exactly this. People who are sending out CV
after CV after CV, feeling sick that they're not even
getting a response, feeling desolate with every every job application
(06:11):
that doesn't get answered.
Speaker 3 (06:12):
Yeah, it was sort of saying the thing you shouldn't say.
I think it's that, you know, the way our system works,
you have to put rates up to get rid of inflation.
You don't necessarily want it to be a recession, though,
and you don't want it to fall down so hard
that it doesn't can't get up and running again. And
it is taking a long time for the lower interest
(06:32):
rates to flow through. There's a lack of confidence out
there that's you know, just making it making people less
likely to invest. We can sent the housing market, which
is still flat installed. Yeah, so you know, I think
I think we're still going to see a couple more
interest rate cuts. At least I'm sure we're going to
(06:53):
get one on August twenty. I don't think this is
going to be, you know, seen as particularly upbeat by
the Reserve Bank. You know, wage pressure is still coming off.
That's another one of those things that economists can talk about,
an upbeat terms or wage wage wage pressures being removed,
so there's well that means you're not getting away as
(07:15):
many as good a wage pay rise. But yeah, it
does mean that if you are hanging in there for
lower interest rates, we're probably heading in the right direction.
Speaker 2 (07:24):
There. God, when it takes off, is it going to
take off with a hiss and a roar?
Speaker 3 (07:29):
Well, that's what concerns me.
Speaker 2 (07:31):
I mean if you don't want that either, do you think.
Speaker 3 (07:35):
I think we're looking at a cyclical recovery, which kind
of means you get back to some sort of normal.
It doesn't necessarily mean a boom. The economists have spoken
to in the last week or two would say that
because we fell so far, if it does come back,
it could feel like a bit of a bit of
a decent recovery. But that's what matters, and that's the
(07:56):
trouble for the politics of it, and we've seen it.
Some people say, with Joe Biden in the US and
so on, that the economists can tell you that the
numbers are looking good. So if by the end of
the year start of next year, the numbers are starting
to look good. That's fine, the economists can tell us that.
But if we don't feel good, that doesn't really count,
and it takes a bit longer to actually feel good.
Speaker 2 (08:17):
I was wondering that what makes us feel good? I
think I was reading Simon Wilson's piece where he said,
you know, if you've got equity in your home and
you feel you can have a bit of reggle room
and you can perhaps treat yourself to getting your teeth
done overseas, that makes you feel rich.
Speaker 3 (08:33):
But yeah, rising house prices make New Zealanders feel good.
A lot of New Zealanders, for better or for worse.
It's just the way it is. It's where we've got
a lot of our wealth tied up. So you know,
when you see the value of your house going up
one hundred or two hundred thousand dollars, you know it
makes the equations on your own finances feel a lot better.
I would hope that some people might be feeling better
(08:55):
off because the key we saver and their savings are
looking strong now that that's actually been going quite well.
But that's not usually enough to make you feel comfortable
if you haven't got job security. So this employment stuff
is pretty crucial because if you are certainly of a
certain age I include my age, and that you know,
(09:16):
and you lose your job in your fifties, for example,
there's a lot of people out there you know you've
got or you've got you may have very specialist skills,
and suddenly there isn't anywhere to go to earn anything
like that money. You'll be in a long list of
people trying to get a job at a supermarket. And
so there are a lot of professional people feeling quite
(09:36):
uncertain about it all. And it's not just the economic cycle.
It's all this AI stuff. You know that the company's
rationalizing and what they can do with computer technology. That
adds a layer of insecurity as well. So that just
makes people a little bit more cautious, and of course
then they don't spend and then the retailers struggle, so
you sort of have to cut through that too. I'm hopeful,
(09:58):
I'm still hopeful that that that I think the cyclical recovery.
I was particularly taken by speaking to some of the
sort of big name Australian economists of been through the
country in the last week. And it's that slightly patronizing
tone that you get from from your Australian cousins or
Australian friends sometimes, which is, oh, you guys, you know,
we're a simple economy. You guys, are you all right?
Speaker 2 (10:19):
And they.
Speaker 3 (10:23):
Have a sense that we sort of do talk ourselves
down a bit during especially in a groom gloomy winter,
and that basically, you know, high commodity prices and low
interest rates is just a recipe for New Zealand coming right,
and it should be. It's just taking quite a while
for the interest rates to the benefits to flow through completely,
(10:45):
and quite a while for the commodity price stuff to
reach the cities, obviously because partly because we've really got
a property slump and we've got the construction sector not
booming in the cities. Wellington's had the government cutbacks, and
you've got to break through that level of sort of
gloominess to get some momentum going.
Speaker 2 (11:07):
Okay. So I'm going to leave that with optimism that
we're coming right.
Speaker 3 (11:12):
You got you gotta have a little bit of optimisty.
Speaker 2 (11:13):
Let's be like Ossie economists. You'll be right. Yeah, he's
good commodities are good. Yeah, you'll be right, Thank you
very much, Liam Dan, New Zealand Herald Business Editor at Large.
Speaker 1 (11:24):
For more from news Talks at B listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
You're listening to a podcast from News talks'd be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
As you've heard now breaking news, which some of you
were outraged by. It's not breaking news. It was expected. Well,
you know, the figures were expected, but it was Yeah. No,
I suppose they have a point. If I'm going to
grizzle about the shrieking alarm on the on the civil
defense alert, perhaps they have a point about breaking news.
Speaker 1 (00:38):
Orr.
Speaker 2 (00:38):
We'll do developing news next time. What do you think, Helen? Anyway,
the latest labor market data from Stats New Zealand shows
our unemployment rates five point two percent. This compares with
five point one in March twenty twenty five four point
seven percent in the June twenty four quarter, slightly better
than the five point three percent expected by the consensus
(01:00):
of economists. New Zealand Herald Business editor at largely M
Dan joins me now to discuss very good morning to you. Okay,
how many people is that who are desperate?
Speaker 3 (01:10):
That was something like a one hundred and fifty eight
thousand people who are unemployed now in the as of
the June quarter. Anyway, it's probably worse since then compared
to one hundred and fifty six thousand in the March quarter,
it's a sixteen thousand more people officially unemployed.
Speaker 2 (01:28):
Right, I'm going to go, how do we define unemployment
these days? Because it changes, doesn't it?
Speaker 3 (01:33):
No, No, this does not change.
Speaker 2 (01:34):
I thought it's different developing, No, not even developed.
Speaker 3 (01:39):
It's very specific and has been for a long time.
So so nineteen eighty six was ok. Yeah, And that's
why I like this measure better than looking at job seekers,
which is the benefit numbers, and they change, that's Rightment
governments are prone to changing the way they count beneficiaries.
They're still interesting for numbers to look at. But unemployment
(02:00):
is very specific. You have to be looking for work
and have zero work, none.
Speaker 2 (02:06):
At all, so oh, that's right.
Speaker 3 (02:07):
And jobs seekers, yeah, the job seekers can be you
can be on the benefit and work a few hours,
for example. Yeah, so it doesn't doesn't.
Speaker 2 (02:16):
Right, Okay, so you've got zero work and you're looking
for it.
Speaker 3 (02:20):
Yeah, that's why it's important for these numbers to also
look at things like the underemployment rate, the under utilization rate.
But yeah, look, I mean you know that the top line,
the official unemployment rate it's slightly better than the economists expected.
I've been reminded by our market skuy Jamie Gray that
it's not actually better than the Reserve Bank was expecting.
(02:42):
The Reserve Bank had five point two and some of
the details beneath the hoods, so to speak, probably looking
a little bit worse than the Reserve Bank expected. So
if you're wondering what the Reserve Bank will be thinking,
they'll be looking back at their own forecasts and they
will still be seeing this is pretty pretty grim. The
reason I think I feel like those of us up
(03:03):
here in Auckland might have been thinking things were a
bit worse is the Auckland numbers themselves are really horrible.
So unemployment rate in Auckland is six point one percent,
so that's you know, continued to rise more steadily than
the rest of the country. I mean, we know we've
(03:23):
talked about the export money coming in through dairy and
all the rest, and that the southern regions are going stronger.
I haven't seen numbers for Wellington because much it would
be pretty rough too, But you know, anecdotally, I think
we're pretty sure that Auckland and Wellington are the places
really doing it. Toughest at the moment in the.
Speaker 2 (03:45):
SA is Wellington. Yeah, I suppose if you haven't seen them,
you don't know, but it's Wellington reached rock bottom yet
I will look.
Speaker 3 (03:51):
I'd definitely be having a look through. But you sort
of they haven't highlighted them in the stats n ZE
press release, which means that you now have to go
through the Excel spreadsheet stiff to find the Wellington numbers.
So but you know, I'm sure they will come through
and there'll be people interested because it's you know, it
is it is an economy of two halves at the moment,
it really is. The you know, the rural regional sector
(04:14):
is more buoyant. I know, things a bit more buoyant
in christ Church, which is a decent sized city, but
it still feeds off the rural economy to some extent.
So you're not surprising sitting in Auckland that we might
be thinking that things were going to be worse than this.
Speaker 2 (04:28):
See and this is not good news for the government.
Speaker 3 (04:31):
No, no, none of this is great news for the government.
Speaker 1 (04:34):
You know.
Speaker 3 (04:34):
And speaking again of you know, not to go on
about breaking news, but you know, we do know, you know,
the economists are pretty pretty good on this, that that
unemployment rises towards the end of the economic cycle, the
labor markets the last thing to turn. Now, what we've
seen in the second quarter is the economy stalling a bit.
(04:55):
People starting to wonder whether the recovery is really happening,
and it just there's some concern. It's been voiced by
economists like Miles Workmen at A and Z that some
companies were hanging on, hanging on and there might be
another wave of redundancies because they and so it's extending everything,
and of course it's extending everything towards twenty twenty six,
which is election year. And you bet your political capital
(05:19):
on fixing the economy, then that's it's a tough sell.
And you know there are still you know, when you
step back, a lot of the economists, especially the Australian
economists I speak to, they just look at New zealing. Ah,
you come right, you'll be right. You know, dairy prices
are good, interest rates are coming down, so you know,
the foundations are still in place for a recovery for
things to come right. But it's gee, it's taking longer
(05:42):
than this government would have liked, that's for sure.
Speaker 2 (05:44):
Absolutely it is. And also, you know, when you I'll
never forget the brutality of Adrian or say, oh, we
need to engineer a recession to get things right. A
recession is exactly this. People who are sending out CV
after CV after CV, feeling sick that they're not even
getting a response, feeling desolate with every every job application
(06:11):
that doesn't get answered.
Speaker 3 (06:12):
Yeah, it was sort of saying the thing you shouldn't say.
I think it's that, you know, the way our system works,
you have to put rates up to get rid of inflation.
You don't necessarily want it to be a recession, though,
and you don't want it to fall down so hard
that it doesn't can't get up and running again. And
it is taking a long time for the lower interest
(06:32):
rates to flow through. There's a lack of confidence out
there that's you know, just making it making people less
likely to invest. We can sent the housing market, which
is still flat installed. Yeah, so you know, I think
I think we're still going to see a couple more
interest rate cuts. At least I'm sure we're going to
(06:53):
get one on August twenty. I don't think this is
going to be, you know, seen as particularly upbeat by
the Reserve Bank. You know, wage pressure is still coming off.
That's another one of those things that economists can talk about,
an upbeat terms or wage wage wage pressures being removed,
so there's well that means you're not getting away as
(07:15):
many as good a wage pay rise. But yeah, it
does mean that if you are hanging in there for
lower interest rates, we're probably heading in the right direction.
Speaker 2 (07:24):
There. God, when it takes off, is it going to
take off with a hiss and a roar?
Speaker 3 (07:29):
Well, that's what concerns me.
Speaker 2 (07:31):
I mean if you don't want that either, do you think.
Speaker 3 (07:35):
I think we're looking at a cyclical recovery, which kind
of means you get back to some sort of normal.
It doesn't necessarily mean a boom. The economists have spoken
to in the last week or two would say that
because we fell so far, if it does come back,
it could feel like a bit of a bit of
a decent recovery. But that's what matters, and that's the
(07:56):
trouble for the politics of it, and we've seen it.
Some people say, with Joe Biden in the US and
so on, that the economists can tell you that the
numbers are looking good. So if by the end of
the year start of next year, the numbers are starting
to look good. That's fine, the economists can tell us that.
But if we don't feel good, that doesn't really count,
and it takes a bit longer to actually feel good.
Speaker 2 (08:17):
I was wondering that what makes us feel good? I
think I was reading Simon Wilson's piece where he said,
you know, if you've got equity in your home and
you feel you can have a bit of reggle room
and you can perhaps treat yourself to getting your teeth
done overseas, that makes you feel rich.
Speaker 3 (08:33):
But yeah, rising house prices make New Zealanders feel good.
A lot of New Zealanders, for better or for worse.
It's just the way it is. It's where we've got
a lot of our wealth tied up. So you know,
when you see the value of your house going up
one hundred or two hundred thousand dollars, you know it
makes the equations on your own finances feel a lot better.
I would hope that some people might be feeling better
(08:55):
off because the key we saver and their savings are
looking strong now that that's actually been going quite well.
But that's not usually enough to make you feel comfortable
if you haven't got job security. So this employment stuff
is pretty crucial because if you are certainly of a
certain age I include my age, and that you know,
(09:16):
and you lose your job in your fifties, for example,
there's a lot of people out there you know you've
got or you've got you may have very specialist skills,
and suddenly there isn't anywhere to go to earn anything
like that money. You'll be in a long list of
people trying to get a job at a supermarket. And
so there are a lot of professional people feeling quite
(09:36):
uncertain about it all. And it's not just the economic cycle.
It's all this AI stuff. You know that the company's
rationalizing and what they can do with computer technology. That
adds a layer of insecurity as well. So that just
makes people a little bit more cautious, and of course
then they don't spend and then the retailers struggle, so
you sort of have to cut through that too. I'm hopeful,
(09:58):
I'm still hopeful that that that I think the cyclical recovery.
I was particularly taken by speaking to some of the
sort of big name Australian economists of been through the
country in the last week. And it's that slightly patronizing
tone that you get from from your Australian cousins or
Australian friends sometimes, which is, oh, you guys, you know,
we're a simple economy. You guys, are you all right?
Speaker 2 (10:19):
And they.
Speaker 3 (10:23):
Have a sense that we sort of do talk ourselves
down a bit during especially in a groom gloomy winter,
and that basically, you know, high commodity prices and low
interest rates is just a recipe for New Zealand coming right,
and it should be. It's just taking quite a while
for the interest rates to the benefits to flow through completely,
(10:45):
and quite a while for the commodity price stuff to
reach the cities, obviously because partly because we've really got
a property slump and we've got the construction sector not
booming in the cities. Wellington's had the government cutbacks, and
you've got to break through that level of sort of
gloominess to get some momentum going.
Speaker 2 (11:07):
Okay. So I'm going to leave that with optimism that
we're coming right.
Speaker 3 (11:12):
You got you gotta have a little bit of optimisty.
Speaker 2 (11:13):
Let's be like Ossie economists. You'll be right. Yeah, he's
good commodities are good. Yeah, you'll be right, Thank you
very much, Liam Dan, New Zealand Herald Business Editor at Large.
Speaker 1 (11:24):
For more from news Talks at B listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
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