Michael Gordon: Westpac senior economist on the unemployment rate rising to 5.2 percent

The sluggish job market is another bump in our road to economic recovery, according to some recent predictions.

The unemployment rate's sitting at 5.2 percent - its highest point in five years. 

In late 2021, it was just 3.2 percent. 

Westpac senior economist, Michael Gordon, says it shows our economic slowdown's ongoing. 

He says it's not too surprising, given the Reserve Bank's moves to control inflation. 

"I think we're getting towards the end - we have seen economic activity picking up, but it's just not coming through in terms of businesses needing to hire just yet." 

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talk ZEDB. Follow
this and our wide range of podcasts now on iHeartRadio.
Heather Duplessy Allen make it.

Speaker 2 (00:18):
Twelve past five. The unemployment rate has risen to five
point two percent now. That is the highest rate since
late twenty twenty. Not as bad as expected though, we
were picking five point three. Michael Gordon is Westpac senior
economist and with us, Hey, Michael, do you reckon this
is the worst we're going to see or are we
going to go further from here?

Speaker 3 (00:36):
I think we're getting near the end, not necessarily there yet.
This has really been I guess, a continuation of the
slowdown in the economy that's been running for a couple
of years now, and we don't know that was really
not not unsurprising given that we had the Reserve Bank
raising interest rates to try and bring inflation under control.

(00:58):
So we're just seeing this very delayed impact that's still
coming through in the jobs market. I think we are
getting towards the end. We have seen economic activity picking up,
but it's just not coming through in terms of businesses
need to hire just yet.

Speaker 2 (01:11):
Are we being saved by the underutilization rate here?

Speaker 3 (01:16):
Not really the underutilization rate as a broader measure, and
therefore you end up with the higher number. Some people
do like to pick it out because it is a
higher number, but when it comes down to it, it
is telling us much the same story as the unemployment
rate itself. They're both back to around where they were
in twenty sixteen.

Speaker 2 (01:37):
Now, what do you expect we're going to get it
as a result of this, with the Reserve Bank still
seeing a.

Speaker 3 (01:42):
Cut, Well, this looked to be pretty much right on
what they were expecting, so I don't think it's new
information for them. So I think really coming back to
what their existing thinking was, and I think the sense
from their last statement was that they were looking at
a cut probably in August. Some of them wanted to
last time, wanted to wait and see how the inflation

(02:03):
numbers and so one turned out. But I think it's
a pretty strong expectation we'll cut this time. What they
signal beyond that, I think would be more interesting. Do
they signal that there's a strong chance of another cut
or two by the end of the year, or they
just leave that there as an option.

Speaker 2 (02:19):
Yeah, good stuff, Michael, Thanks very much. Michael Gordon Westpac
Senior Economists.

Speaker 1 (02:23):
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