Michael Gordon: Westpac Senior Economist on the increasing number of filled jobs

The economy may be starting to turn a corner, but it could be a slow turn. 

Stats NZ figures show the number of filled jobs increased 0.3% in November – the first monthly increase in eight months. 

Service sector jobs increased, but the number of primary sector and goods industries jobs declined. 

Westpac Senior Economist Michael Gordon told Tim Beveridge he still expects unemployment to surpass 5% this year. 

He says it does tend to lag a bit, so there's still some GDP weakness to be reflected. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:17):
Yeah.

Speaker 3 (00:17):
For the first time since March, there's been a spike
in jobs being filled Stats New Zealand's released the November
figures with almost six thousand roles being added. Service industries
fueled the increase, but there's skepticism surrounding the figures, and
Westpac senior economist Michael Gordon joins me. Michael, good morning,
Good morning. On the face of it, it's good news.

Speaker 2 (00:38):
Isn't it. Yes, certainly, it's adding to a small but
growing list of indicators that suggest the the economy is
picking up again compared to that really rough period that
we saw through the middle of last year, which is
revealed in the GDP figures at the end of the
last year.

Speaker 3 (00:55):
How likely is it that the figures will be revised.

Speaker 2 (00:59):
There has been a tendency to revise them down from
their initial release, not by huge amounts, So we saw
in the figures out yesterday was sort of point three
percent increase in the number of filled jobs. The revisions
tend to be in the order of point two to
point three percent, So maybe this turns into a zero
at worst, it's still better than what we've seen for

(01:19):
the several months before that.

Speaker 3 (01:21):
Is it normal to see an increase of jobs at
this time of year, I imagine. I don't know whether
this includes temporary jobs because of sort of seasonal fluctuations.

Speaker 2 (01:31):
Yeah, these figures try to adjust for that. So what
it's telling us is that these were figures for November.
So I think it suggests there was a bit of
gearing up in anticipation of the summer tourist season. So
certainly the raw number of jobs went up by more
than six thousand, but even when you adjusted that, it
suggests there was probably a bit more going on than
we've seen in the last few years.

Speaker 3 (01:50):
What are the industries that look like they're continuing to
struggle to generate jobs.

Speaker 2 (01:55):
It's really the ones that are I think quite cyclical
sectors anyway, So it's manufacturing, construction, retail of the sort
of the ones that stand out, and they've really been
seeing an ongoing leak of job losses for about a
year and a half.

Speaker 3 (02:09):
Now, what about the increase in service industries? Is that
more seasonal tourism stuff or or other jobs.

Speaker 2 (02:17):
It's a bit of a mix we saw where you
basically continue to see gains in health and education overall,
so they've come under the umbrella of services. There was
also I think a notable pickup in arts and recreation services,
so I think that's broadly within the realm of tourism
later things, so it's kind of the fun things for
tourists to do.

Speaker 3 (02:38):
Are you expecting still to see employment drop below five percent?

Speaker 2 (02:44):
Well, the unemployment rate is expected to go above five percent.
We're already at four point eight on the last reading,
so it's not a huge lead to get there, and
it does tend to lag their broader economic cycle of it,
so there's probably a bit of that GDT weakness still
to be reflected in those jobs numbers.

Speaker 3 (03:03):
Great stuff. Hey, good to talk to you. Thanks Michael.
That is Michael Gordon, who's Senior Westpac. Westpac Senior.

Speaker 1 (03:09):
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