Nick Tuffley: ASB chief economist on the unemployment rate

A major bank believes unemployment will remain fairly flat this year, rather than anything catastrophic.

The national rate dipped slightly to 5.3 percent in the first three months of this year.

ASB chief economist Nick Tuffley told Ryan Bridge says he's not overly pessimistic about the next couple of quarters.

But he cautions the next few months are really the danger zone as businesses hunker down and defer some decisions.

Youth unemployment is up from 13.3 to 14.4 percent.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So unemployment came in five point three percent for quarter one.
That was down from five point four percent quarter four
to twenty twenty five, still to feel the full impact
of the water course, it did include a month of it.
Youth unemployment is the one you want to watch. That's
up fourteen point four percent from thirteen point three. Wage
growth also out of five year low two percent. Nick Tuffley,
Asbchief Economist.

Speaker 2 (00:20):
Nick, good morning, Good morning.

Speaker 1 (00:22):
Worst is yet to come on jobs.

Speaker 2 (00:25):
Well, we do think we'll see a bit of a
hiccup in hiring through the middle parts of this year,
but we've we've got a view that employment will be
sort of fairly flat rather than something catastrophic. Well, we'll
obviously have to wait and see, but the next quarter
or two. So where we are now and over the
next few months is sort of more the danger zone
because that's where we're in, that time where people are

(00:46):
adjusting their spending habits and being more cautious, and businesses
are sort of deferring or reconsidering decisions or just hunting
down to wait and see for a little bit.

Speaker 1 (00:55):
The young people who are not in work, not training
all that good stuff. The number going up is is
this normally what happens when there is problems with employment
and it's the young ones who have the most trouble
or is there something more going on here?

Speaker 2 (01:08):
Well, unfortunately, it's the pattern that we often see because
your younger people are people who have less experience, if
they're coming out of say school or university into a
market where hiring is pretty cautious, and that's the sort
of environment we've been in for several years. Unfortunately, it's

(01:28):
tough getting that first job that gets you on that
employment leader. So unfortunately, this is a pattern that we
do tend to see.

Speaker 1 (01:36):
How long before we see wages start to uplace inflation again, Well.

Speaker 2 (01:41):
At this point, we expect wages are going to be
sort of pretty pretty muted really, so we don't really
see wage growth sort of gathering a lot of steam
and being too much of an inflation problem. So we
expect that wages are going to remain that the growth
of them there remains sort of fairly steady, sort of
roughly where it is. So, look, we're not in the

(02:02):
environment we were in a few years ago where because
you had super low unemployment, employees scrambling to find people
and paying huge wage increases even though there wasn't any
productivity there that caused quite a bit of inflation. This
time around, we're not so likely to have that problem,
even though inflation is pretty high, but means that we're
not getting that compensation, so to speak, in their pay

(02:24):
packets for these that are added fuel costs and some
of the other costs increases.

Speaker 1 (02:29):
In your case, giving with one takes with the other,
doesn't it. Nick, Appreciate your time, Nick Tafley, a speechief Economists.
You're on news TALKSB for more from earlier edition with
Ryan Bridge.

Speaker 2 (02:39):
Listen live to News Talks here' be from five am weekdays,
or follow the podcast on iHeartRadio