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." 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Heather Duplessy Allen make it 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 2 (00:20):
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.

(00:41):
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 1 (00:54):
Are we being saved by the underutilization rate here?

Speaker 2 (01:00):
Really the underutilization rates 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 1 (01:21):
Now, what do you expect we're going to get it
as a result of this, with the Reserve Bank still
seeing a cut.

Speaker 2 (01:27):
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 numbers and

(01:47):
so on turned out. But I think it's a pretty
strong expectation we'll get another cut this time. What they
signal beyond that, I think it'd be more interesting. Do
they signal that there's a strong chance of another cut
or two by the end of the or they just
leave that deer as an option.

Speaker 1 (02:02):
Yeah, good stuff, Michael, Thanks very much, Michael Gordon WISPAC
Senior Economists. For more from Hither Duplessy Allen Drive, listen
live to news talks it'd be from four pm weekdays,
Or follow the podcast on iHeartRadio