November 5, 2024 • 10 mins
Unemployment has risen again.
Latest figures from Stats NZ show the unemployment rate has reached 4.8% in the September quarter.
That's up from 4.6% in the June quarter, and well up from 3.2% in the December 2021 quarter.
NZ Herald Business Editor Liam Dann told Kerre Woodham that there was no question they would see people lose their jobs, but the fact that it came in lower than many forecasts is a good thing.
He says that over the last 20 or 30 years, New Zealand has historically had an unemployment rate above 5%, so we are still below the historical average.
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the Kerry Wood of Morning's podcast from
News Talk sed B.
Speaker 2 (00:11):
As you've heard our news, unemployment has risen again. It
is four point eight percent in the September quarter, up
from four point six in the June quarter. Although we
can take a crumb of good news because economists had
been predicting a rate between four point nine and five
point one. New Zealand Herald Business editor at large LYM
(00:32):
Dan joins me, now, very good morning to you.
Speaker 3 (00:35):
Oy.
Speaker 2 (00:36):
Well it is goodish news, isn't it.
Speaker 1 (00:38):
Yeah.
Speaker 3 (00:39):
I mean, look, we know the direction of this news
was bad, that it was, and we're expecting, you know,
things to get worse, and so that we knew labor
market stuff tends to lag in the economic cycle, so
there was no question that we're going to see more
people losing jobs unfortunately. But on balance, you know, you
take that it's it's coming lower than forecasts, which means
(01:01):
fewer people lost their job in that quarter, which is
obviously a good thing. I know, there's some tough stuff
in it, and just to sort of you know, there's
a lot of statistics in numbers, of course, but the
one that jumps out to me is that we've still
got the number of jobless people who had been employed
in the last five years and haven't basically been made
(01:22):
laid off or made redundant or just gone out of
business rose thirty four point five percent annually to fifty
five thousand. So that's fifty five thousand people in the
last year who have just had their world turned upside
down by redundancy or their business failing or something like that.
So even though we can say, oh, look, the stats
are better than we thought and things, it is a
(01:42):
reminder that these these periods are really tough on people
and tougher society.
Speaker 2 (01:50):
Well every percentage point as a family.
Speaker 3 (01:52):
Yeah, well, you know, many families. I guess, you know,
that's right.
Speaker 2 (01:56):
And that's what I remember when they were engineering this
recession and it just you know, and Adrian or was saying, well,
we need to get to this point of unemployment. That's
the most cynical, brutal way to manage an economy.
Speaker 3 (02:12):
That is, unfortunately, how we run our run our world
in this particular system.
Speaker 2 (02:19):
And I can't think of a better one, you know,
we know, I.
Speaker 3 (02:21):
Know, that's the system except for every you know, the
worst system, except for every other system. Exactly, and it's yeah,
it is pretty brutal. You know, New Zealand has historically
run over the last twenty or thirty years unemployment rates
slightly above five percent, so we are still below the
(02:41):
historical average. I know it's all a bit different now
because you've got different categories of sickness benefits and all
that sort of stuff, and I think the numbers of
actual people on benefits is probably a different story. But
you know, in terms of that pure unemployment rate, it's
it's not at outrageously high historical levels. But I always
(03:03):
think that it really is the direction of travel. You've
got people losing their jobs and that really casts a
dampner on the economy, and of course that's what the
central Bank needed to see to get that inflation out.
Speaker 2 (03:15):
I've got textas and callers saying that, you know, they're
very highly qualified, many years experience, they're turning up and
there are two or three hundred people applying for the
same job with just as much experience. It's just as
many qualifications.
Speaker 3 (03:28):
Yeah, it turns on a dime. I mean, you know
we would have been talking about it, you know, just
say two years ago we had a labor shortage in
this country that the employers couldn't get people.
Speaker 2 (03:38):
Yes up, they were wringing me, screaming from anybody.
Speaker 3 (03:42):
And it's that whipsaw, you know, like it's just such
an extreme turnaround. That's what it would be nice to
see managed through the economy and a bit more of
a stable fashion. So it look it is really tough.
I hope this means that we see you know, it
could just be timing, so there could be a lot
more stuff to come. It could also mean that maybe,
(04:04):
you know, things holding up better than we had thought,
and that the ultimate peak for unemployment will come in
a bit lower, which at the moment economists think about
five point five or five point six percent, So that's
a way to go to get there. The other thing
I was going to touch on was interest rates. Of course,
because people do care about where the mortgage rate is going.
(04:28):
This probably means, because it is better than expected and
things are still holding up, that it's less likely or
almost completely unlikely now that the Reserve Bank would look
at seventy five bases point cut at the next meeting
November twenty nine. I think it is so, you know,
still probably a fifty basis point cut. But yeah, that
(04:50):
seventy five was always a bit of an outside bet
because people sort of saw some you know, pretty grim
stats for a while. Yeah, I mean, there's not much
more to come in to change their mind at this point,
so I'd say odds on for fifty bases point cut there,
barring you know, something happening on the other side of
the world to really shake markets up.
Speaker 2 (05:12):
I know they say that redundancies affect young people disproportionately,
but boy, it's been right across the board in terms
of in terms of who's been made unimprod. You've got
your traditional meat workers, you've got media, you've got you know,
very very highly qualified senior.
Speaker 3 (05:30):
Professional construction sector, construction sector. Yeah and yeah, I mean
numerically it probably affects more younger people, but if you
think about the impact on your life, you know, I'm
not dismissing the impact on anyone's life, but if you're younger,
you've maybe got less responsibilities, You've got more time up
your sleep for sure, to readjust and reassess it. It's
(05:53):
pretty tough. If you're made redundant. It's a sixty yeah,
sixty post fifty, you know, and if you've still got
mortgage debt, and it's just you know, to contemplate retraining
and all those sort of things. And then of course
there's all the prejudice of you know, you know, just
the way that employers may look at older workers and think, oh, well,
(06:14):
you know, it's cheaper to get the young person in.
So it is tough. It's really difficult for older workers,
and so I sympathize absolutely.
Speaker 2 (06:22):
There's all the prejudice against gen Z as reference.
Speaker 3 (06:27):
They seem fairly confident that they can they can pick
and choose it still some people, according to that, so that.
Speaker 2 (06:33):
They can make their own demands. But yeah, it must be.
Speaker 3 (06:36):
That it's a bit tough for in a market like this.
So so that that that survey, which was the one
you're referring to, which is suggesting that gen Z will
turn up to job job interviews and say well, I'll
be working from home, thanks and all the rest of it.
I wonder if that's a little bit of an overhang
from from that period where we had that labor market shortage,
and in a way, those first those people who came
(06:56):
onto the job market then probably got an unrealistic expectation
of what what what the job market is like really
across time. Usually isn't a case that the people looking
for the job can pick and choose to that extent.
And that's sort of where we're back to at the moment.
Speaker 2 (07:12):
I think, how do we define somebody who was unemployed,
because that also has changed.
Speaker 3 (07:19):
Yeah, well, no, no, it hasn't. It's been the same
since nine eighty six.
Speaker 2 (07:22):
And the oh no, sorry, I meant like back in
the day, if you were unemployed, I mean you had
no job at all.
Speaker 3 (07:28):
Yeah, no job at all. That's absolutely how we define it.
There's been all sorts of changes and benefits. But this,
this survey, and this is one of the reasons why
I sort of stick up for it is that it's
consistent right through. So yeah, it doesn't include So you
have to look at something called underutilization. If you want
to see the numbers of people who are working a
little bit but would like to work more. So, if
(07:48):
you're a contract worker, and let's have a look, that
is up to eleven point six percent. Corly change was
actually down a little bit though, and you'll change one
point two percent, so pretty pretty flat. Actually, you know
that that's and that's possibly affection of the fact that
is full time workers go, people do get you know,
to employers start to look at contract workers. But that
(08:11):
is you know, for contract workers who maybe work twenty
hours a week and you know, if they'd like more work,
they would say that they were underutilized.
Speaker 2 (08:22):
Yeah, so the underutilization I think is probably a bigger
indication of where the unemployment.
Speaker 3 (08:27):
Yeah, because of the way, because of the way that
the job market is now, a lot of people do
work on contract and freelancers and work for themselves that
sort of thing. So that's where you'd see even you know,
like tradees and so on, maybe not counting as unemployed,
but not having enough work.
Speaker 2 (08:43):
Right now, it's really it's been you know, for some
people it's been COVID was a boom, absolute boom time.
For others that was completely bust and they've gone about
trying to rebuild their industries or their businesses. But for
your average mum and dad, it's been a grind from
(09:05):
twin twenty right the way through.
Speaker 3 (09:08):
Yeah, I think the annoying thing was and with hindsight,
I wish we could have played it differently. But but
the boom through COVID, it wasn't like we were really
able to enjoy it because you had this weight of COVID,
of the lockdowns and the concern and fear about what
was going to happen next. So yeah, while they pump
pumped the economy through with money, it wasn't like people,
(09:31):
even even businesses that were doing quite well, were still
suffering from the sort of anxiety of COVID. So nobody
sort of enjoyed the upside of that part of it.
Speaker 2 (09:39):
I did a couple of awards and the brief windows
when when you know, you could gather in a room
and they said they couldn't even enjoy doing well because
so many friends of these had around the barbecue, had
businesses that have gone under.
Speaker 3 (09:51):
But I mean the messaging, I wish you know, and
again it's it's hindsight. I guess the media is part
of it. But if we could have somehow made it
clear that this wasn't real money, that you know, if
you were right, put it, put it aside, you know,
pay off debt, because there's going to be a flip
side to this. If you pump the economy full of
money somehow, you know it's going to come out to gate.
Speaker 2 (10:15):
Thank you so much, Liam Dane always good to talk
New Zealand Herald's Business editor at large.
Speaker 1 (10:19):
For more from Kerry Wooden Mornings, listen live to news
talks that'd be from nine am weekdays, or follow the
podcast on iHeartRadio
You're listening to the Kerry Wood of Morning's podcast from
News Talk sed B.
Speaker 2 (00:11):
As you've heard our news, unemployment has risen again. It
is four point eight percent in the September quarter, up
from four point six in the June quarter. Although we
can take a crumb of good news because economists had
been predicting a rate between four point nine and five
point one. New Zealand Herald Business editor at large LYM
(00:32):
Dan joins me, now, very good morning to you.
Speaker 3 (00:35):
Oy.
Speaker 2 (00:36):
Well it is goodish news, isn't it.
Speaker 1 (00:38):
Yeah.
Speaker 3 (00:39):
I mean, look, we know the direction of this news
was bad, that it was, and we're expecting, you know,
things to get worse, and so that we knew labor
market stuff tends to lag in the economic cycle, so
there was no question that we're going to see more
people losing jobs unfortunately. But on balance, you know, you
take that it's it's coming lower than forecasts, which means
(01:01):
fewer people lost their job in that quarter, which is
obviously a good thing. I know, there's some tough stuff
in it, and just to sort of you know, there's
a lot of statistics in numbers, of course, but the
one that jumps out to me is that we've still
got the number of jobless people who had been employed
in the last five years and haven't basically been made
(01:22):
laid off or made redundant or just gone out of
business rose thirty four point five percent annually to fifty
five thousand. So that's fifty five thousand people in the
last year who have just had their world turned upside
down by redundancy or their business failing or something like that.
So even though we can say, oh, look, the stats
are better than we thought and things, it is a
(01:42):
reminder that these these periods are really tough on people
and tougher society.
Speaker 2 (01:50):
Well every percentage point as a family.
Speaker 3 (01:52):
Yeah, well, you know, many families. I guess, you know,
that's right.
Speaker 2 (01:56):
And that's what I remember when they were engineering this
recession and it just you know, and Adrian or was saying, well,
we need to get to this point of unemployment. That's
the most cynical, brutal way to manage an economy.
Speaker 3 (02:12):
That is, unfortunately, how we run our run our world
in this particular system.
Speaker 2 (02:19):
And I can't think of a better one, you know,
we know, I.
Speaker 3 (02:21):
Know, that's the system except for every you know, the
worst system, except for every other system. Exactly, and it's yeah,
it is pretty brutal. You know, New Zealand has historically
run over the last twenty or thirty years unemployment rates
slightly above five percent, so we are still below the
(02:41):
historical average. I know it's all a bit different now
because you've got different categories of sickness benefits and all
that sort of stuff, and I think the numbers of
actual people on benefits is probably a different story. But
you know, in terms of that pure unemployment rate, it's
it's not at outrageously high historical levels. But I always
(03:03):
think that it really is the direction of travel. You've
got people losing their jobs and that really casts a
dampner on the economy, and of course that's what the
central Bank needed to see to get that inflation out.
Speaker 2 (03:15):
I've got textas and callers saying that, you know, they're
very highly qualified, many years experience, they're turning up and
there are two or three hundred people applying for the
same job with just as much experience. It's just as
many qualifications.
Speaker 3 (03:28):
Yeah, it turns on a dime. I mean, you know
we would have been talking about it, you know, just
say two years ago we had a labor shortage in
this country that the employers couldn't get people.
Speaker 2 (03:38):
Yes up, they were wringing me, screaming from anybody.
Speaker 3 (03:42):
And it's that whipsaw, you know, like it's just such
an extreme turnaround. That's what it would be nice to
see managed through the economy and a bit more of
a stable fashion. So it look it is really tough.
I hope this means that we see you know, it
could just be timing, so there could be a lot
more stuff to come. It could also mean that maybe,
(04:04):
you know, things holding up better than we had thought,
and that the ultimate peak for unemployment will come in
a bit lower, which at the moment economists think about
five point five or five point six percent, So that's
a way to go to get there. The other thing
I was going to touch on was interest rates. Of course,
because people do care about where the mortgage rate is going.
(04:28):
This probably means, because it is better than expected and
things are still holding up, that it's less likely or
almost completely unlikely now that the Reserve Bank would look
at seventy five bases point cut at the next meeting
November twenty nine. I think it is so, you know,
still probably a fifty basis point cut. But yeah, that
(04:50):
seventy five was always a bit of an outside bet
because people sort of saw some you know, pretty grim
stats for a while. Yeah, I mean, there's not much
more to come in to change their mind at this point,
so I'd say odds on for fifty bases point cut there,
barring you know, something happening on the other side of
the world to really shake markets up.
Speaker 2 (05:12):
I know they say that redundancies affect young people disproportionately,
but boy, it's been right across the board in terms
of in terms of who's been made unimprod. You've got
your traditional meat workers, you've got media, you've got you know,
very very highly qualified senior.
Speaker 3 (05:30):
Professional construction sector, construction sector. Yeah and yeah, I mean
numerically it probably affects more younger people, but if you
think about the impact on your life, you know, I'm
not dismissing the impact on anyone's life, but if you're younger,
you've maybe got less responsibilities, You've got more time up
your sleep for sure, to readjust and reassess it. It's
(05:53):
pretty tough. If you're made redundant. It's a sixty yeah,
sixty post fifty, you know, and if you've still got
mortgage debt, and it's just you know, to contemplate retraining
and all those sort of things. And then of course
there's all the prejudice of you know, you know, just
the way that employers may look at older workers and think, oh, well,
(06:14):
you know, it's cheaper to get the young person in.
So it is tough. It's really difficult for older workers,
and so I sympathize absolutely.
Speaker 2 (06:22):
There's all the prejudice against gen Z as reference.
Speaker 3 (06:27):
They seem fairly confident that they can they can pick
and choose it still some people, according to that, so that.
Speaker 2 (06:33):
They can make their own demands. But yeah, it must be.
Speaker 3 (06:36):
That it's a bit tough for in a market like this.
So so that that that survey, which was the one
you're referring to, which is suggesting that gen Z will
turn up to job job interviews and say well, I'll
be working from home, thanks and all the rest of it.
I wonder if that's a little bit of an overhang
from from that period where we had that labor market shortage,
and in a way, those first those people who came
(06:56):
onto the job market then probably got an unrealistic expectation
of what what what the job market is like really
across time. Usually isn't a case that the people looking
for the job can pick and choose to that extent.
And that's sort of where we're back to at the moment.
Speaker 2 (07:12):
I think, how do we define somebody who was unemployed,
because that also has changed.
Speaker 3 (07:19):
Yeah, well, no, no, it hasn't. It's been the same
since nine eighty six.
Speaker 2 (07:22):
And the oh no, sorry, I meant like back in
the day, if you were unemployed, I mean you had
no job at all.
Speaker 3 (07:28):
Yeah, no job at all. That's absolutely how we define it.
There's been all sorts of changes and benefits. But this,
this survey, and this is one of the reasons why
I sort of stick up for it is that it's
consistent right through. So yeah, it doesn't include So you
have to look at something called underutilization. If you want
to see the numbers of people who are working a
little bit but would like to work more. So, if
(07:48):
you're a contract worker, and let's have a look, that
is up to eleven point six percent. Corly change was
actually down a little bit though, and you'll change one
point two percent, so pretty pretty flat. Actually, you know
that that's and that's possibly affection of the fact that
is full time workers go, people do get you know,
to employers start to look at contract workers. But that
(08:11):
is you know, for contract workers who maybe work twenty
hours a week and you know, if they'd like more work,
they would say that they were underutilized.
Speaker 2 (08:22):
Yeah, so the underutilization I think is probably a bigger
indication of where the unemployment.
Speaker 3 (08:27):
Yeah, because of the way, because of the way that
the job market is now, a lot of people do
work on contract and freelancers and work for themselves that
sort of thing. So that's where you'd see even you know,
like tradees and so on, maybe not counting as unemployed,
but not having enough work.
Speaker 2 (08:43):
Right now, it's really it's been you know, for some
people it's been COVID was a boom, absolute boom time.
For others that was completely bust and they've gone about
trying to rebuild their industries or their businesses. But for
your average mum and dad, it's been a grind from
(09:05):
twin twenty right the way through.
Speaker 3 (09:08):
Yeah, I think the annoying thing was and with hindsight,
I wish we could have played it differently. But but
the boom through COVID, it wasn't like we were really
able to enjoy it because you had this weight of COVID,
of the lockdowns and the concern and fear about what
was going to happen next. So yeah, while they pump
pumped the economy through with money, it wasn't like people,
(09:31):
even even businesses that were doing quite well, were still
suffering from the sort of anxiety of COVID. So nobody
sort of enjoyed the upside of that part of it.
Speaker 2 (09:39):
I did a couple of awards and the brief windows
when when you know, you could gather in a room
and they said they couldn't even enjoy doing well because
so many friends of these had around the barbecue, had
businesses that have gone under.
Speaker 3 (09:51):
But I mean the messaging, I wish you know, and
again it's it's hindsight. I guess the media is part
of it. But if we could have somehow made it
clear that this wasn't real money, that you know, if
you were right, put it, put it aside, you know,
pay off debt, because there's going to be a flip
side to this. If you pump the economy full of
money somehow, you know it's going to come out to gate.
Speaker 2 (10:15):
Thank you so much, Liam Dane always good to talk
New Zealand Herald's Business editor at large.
Speaker 1 (10:19):
For more from Kerry Wooden Mornings, listen live to news
talks that'd be from nine am weekdays, or follow the
podcast on iHeartRadio
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