Mike Jones: BNZ Chief Economist on unemployment expected to hit near nine year high

Unemployment has hopefully almost reached its peak.

Latest Stats NZ data is expected to show unemployment has reached 5.3% in the September quarter.

That's up from 5.2% in the June quarter.

BNZ Chief Economist Mike Jones told Andrew Dickens they expect another rise in the December quarter, before the job market starts to recover next year.

He says there's still a bit of slog ahead of us, but there's encouraging signs, like job ads lifting and businesses wanting to increase employment.

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Episode Transcript

Speaker 1 (00:00):
Well, today is today the unemployment figures come out and
they're not looking flash. To be fair, the economist are
picking a nine year high of five point three percent
for the September quarter. The worst is twenty sixteen. Here
some good news, though it could give therbns hed an
excuse to cut rates again, not that they need an excuse.
Mike Jones is the beigin Zi's chief economist and joins us. Now, hell,
I mate, come on, what's your back?

Speaker 2 (00:22):
Well with the conspus there at five point three percent,
so a bit of a nudge up.

Speaker 1 (00:27):
Is this the worst of it? Or is there more
to come? Or will it rebound from here? All wee
at bottom.

Speaker 2 (00:33):
We think we're getting close to the to the top
for the unemployment rate cycle. I mean we have another
five brillion forecast the next quarter and then things starting
to improve from next year. So look, there's still a
ways to go. It's a little bit of a slog
ahead of us. But I think importably we are starting
to see a few more encouraging signs out there, whether
it's job ads starting to lift or employers telling us

(00:53):
in business surveys that they expect to increase employment over
the year ahead.

Speaker 1 (00:58):
They are less use participating in our workforce. And tell
me about that, and how does it impact on the numbers?

Speaker 2 (01:07):
Yeah, certainly we've seen youth employment bear the brunt of
us adjustment. Really. I mean, we saw obviously back for
years now in COVID, youth unemployment dropped quite noticeably and
youth workers were pulled into the labor force given those
really strong conditions at the time. And what was seen
in the last kind of year or eighteen months is
almost the reverse of that, with a lot of those

(01:28):
youth workers leaving the labor force or maybe going back
to study and training and so forth. And that's what
we typically see in an unemployment cycle, but probably a
little bit more than usual in this one.

Speaker 1 (01:43):
And do you think these figures will help push along
the RB to doing more cuts.

Speaker 2 (01:51):
Well, that's right, there's the facts already got a five
point three percent in its numbers, so you get that
result today. It shouldn't rush too many feathers down at
the bank, and it does play to the grain of
the economy needing a little bit more help. So another
twenty five point cut later this month, that's in our forecast,

(02:12):
and we suspect that it may well be the last.

Speaker 1 (02:15):
Well, one would hope. So it's interesting how you say
we're at the top of the cycle, whereas I prefer
to say we're at the bottom of the cycle, because
nobody likes unemployment. To be fair, Mike, enjoy your job
today and thank you so much for waking up early
to us. That is Mike Jones, bigin zi's chief economist.

Speaker 2 (02:29):
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