Henry Russell: ANZ Economist says unemployment is expected to rise to over 5%

Unemployment's expected to peak in the middle of the year.  

Stats NZ will release the labour market data for the final quarter of last year at 10.45 this morning. 

It's widely thought the unemployment rate will rise to about 5.1%.  

ANZ economist Henry Russell told Mike Hosking it's a lag statistic, so we'll see last year's economy reflected in the unemployment numbers today and into this year. 

He says their current forecast is for it to peak at 5.5% in the middle of this year. 

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Episode Transcript

Speaker 1 (00:00):
Jobs darted today. Consensus seems to be will have lost
about thirty thousand of them in the past year, which
will give us an unemployment rate of about five point
one ish aans At economist Henry Russell with us Henry morning.

Speaker 2 (00:10):
Good morning.

Speaker 1 (00:11):
What's your number.

Speaker 2 (00:12):
We're at five point one two, so that would be
a lift from four point eight percent in the previous quarter.
And it looks like everyone's landed around the same figure
today with a.

Speaker 1 (00:20):
Peak of what and when.

Speaker 2 (00:24):
So our current forecast is for the unemployment rate to
peak at five and a half percent in the middle
of this year. But recent data has actually been slightly
more encouraging and that we have seen a return and
monthly feel jobs data over the past two months. And
part of the reason the unemployment rate isn't lifting isn't
likely to lift so high, is that we are also

(00:44):
seeing our strongest response from the supply side. I less
the people are exiting the workforce, most likely because jobs
are harder to come by and potentially chasing better opportunities offshore.
So the hopes that we do rights to peak slightly
below that sometime in the first half.

Speaker 1 (01:02):
It's like the mortgage clippers are saying earlier on in
the program, it's sort of the doom days never really came,
which I suppose is the glass half full scenario. Do
you see something positive in the latter part of next year?
Is that the whole scenario of what we're hearing from
economists at the moment.

Speaker 2 (01:17):
Yeah. Absolutely. I think it is important to note that
these data today are very much a reflection of where
the economy has been rather than necessarily where it's going.
So the labor market does tend to lag the broader
economic cycle. And what we've seen over recent months is
that the recovery is underway in the economy. Business confidence
has risen sharp, the consumer confidence is recovering, card spendings

(01:40):
now trending higher. There's a lot of positives, but you know,
these things do take time. It won't be instant, but
the second half this year is certainly likely to be brighter.

Speaker 1 (01:49):
Big ship, slow turn. Henry go well, appreciate it. Henry
Russell ains at Economists. For more from the Mic Asking Breakfast,
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