Mike Jones: BNZ Chief Economist on the unemployment numbers expected today

Finding a job's set to get tougher before it gets easier.

Unemployment reached a near-decade high in the last three months of last year as job growth failed to keep up with the number of people moving to New Zealand.

Stats NZ data due out this morning is expected to show it remained steady or rose slightly in the first three months of this year.

BNZ Chief Economist Mike Jones told Ryan Bridge it's expected to keep rising.

He expects unemployment to peak at 5.8% at the end of this year.

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Episode Transcript

Speaker 1 (00:00):
Right, Let's go to today's unemployment number, which we're going
to get at about quarter to eleven this morning, we'll
get the job's number. This is Q one. Unemployment expected
to hold around five point four percent, may tick up
slightly to five and a half. Still more people looking
for jobs and jobs available. Mike Jones, chief economist at
being in ZB with me this morning.

Speaker 2 (00:18):
Get a Mike, good morning.

Speaker 1 (00:20):
This is quarter one, so basically pre war. I mean
there'll be a bit of war, but mainly pre war.

Speaker 2 (00:25):
Right, Yeah, that's right. These numbers have been overtaken by
events a little bit. I think we'll see probably a
picture of a steadying but still pretty sluggish sort of
jobs environment from these figures.

Speaker 1 (00:38):
Where are you picking it's going to peak unemployment?

Speaker 2 (00:43):
Well, it wasn't so long ago. We thought actually these
Q one numbers would mark the peak, but of course
that's changed in light of events. We now think unemployment
probably drifts up over most of this year and peaks
set five point eight percent by the end.

Speaker 1 (00:59):
Of the year. So when we're talking about a recovery
and sort of jobs, we're looking at twenty twenty seven.

Speaker 2 (01:05):
Now, that's I think what we are looking at. I
think that that picture of a recovery in labor market
this conditions has proven elusive and in sliding into twenty
twenty seven. Of course, the labor market is the last
shoe to drop. It does tend to lag the rest
of the economy. So if we do see a bit
of a steadying and economic growth over the second half

(01:27):
of this year, well that would pave the way for
a better looking labor market yet next year.

Speaker 1 (01:32):
And is this number about an increase in the number
of workers or is it about job losses?

Speaker 2 (01:41):
More the former, we actually do think we've got some
job's growth in the court, not a whole lot, but
an increase of zero point two percent. That would only
actually be the second quarter in the last eighteen months
in which you've got job's growth. But we don't think
that will be enough to offset the growth in the
labor supply through the quarter, so you still get a

(02:03):
list in unemployment or a slight nudge up and unemployment
on our forecast to five and a half the season.

Speaker 1 (02:09):
Mike, how important is this number for our economy because
the last time we spoke about it, well, the last
time we had a quarterly result. It's very much about
giving people confidence. I mean, if you know that if
you're looking for work and you know there's a job
out there, or if you're in a job you don't
like and you want to move to a better one,
or you want to get a pay raise, all those
things are important for growth.

Speaker 2 (02:28):
Right, It's right, that's right, And I think the labor
market has been in this sluggish, slow and low environment
where there's been a bit of job's growth, but not
a lot, as I say, not generally enough to offset
growth in the labor supply, and so that's meant that
opportunities to move has been a little bit more few

(02:51):
and far between than we would like, and that's kept
wage growth relatively low as well.

Speaker 1 (02:57):
Mike, good to have you on the show. This morning
is always Mike Jones Cheap Economist b n Z.

Speaker 2 (03:02):
For more from early edition with Ryan Bridge, listen live
to News Talks it B from five am weekdays, or
follow the podcast on iHeartRadio.