1 00:00:00,040 --> 00:00:02,719 Speaker 1: The unemployment numbers out this morning for quarter three, currently 2 00:00:02,720 --> 00:00:05,480 Speaker 1: sitting at four point six percent, but most economists expecting 3 00:00:05,519 --> 00:00:07,920 Speaker 1: it to rise to five percent, which would make it 4 00:00:07,960 --> 00:00:11,400 Speaker 1: the highest since twenty twenty. We also have new household 5 00:00:11,400 --> 00:00:13,640 Speaker 1: living cost numbers out yesterday, which we'll talk about shortly. 6 00:00:13,720 --> 00:00:16,640 Speaker 1: Nick Toughley is the TIEF economist at ASB Bank. Nick, 7 00:00:16,640 --> 00:00:19,680 Speaker 1: good morning, Good morning, Great to have you on the show. 8 00:00:20,720 --> 00:00:23,160 Speaker 1: So what do you reckon? What's the number we're looking 9 00:00:23,160 --> 00:00:23,600 Speaker 1: for today? 10 00:00:24,960 --> 00:00:28,200 Speaker 2: We do think we're going to see employment itself look 11 00:00:28,320 --> 00:00:30,720 Speaker 2: less resilient than what it has been and actually fall 12 00:00:30,760 --> 00:00:33,400 Speaker 2: about half a percent over this quarter. Now it may 13 00:00:33,440 --> 00:00:37,040 Speaker 2: surprise you, but so far during this downturn, employments actually 14 00:00:37,120 --> 00:00:39,800 Speaker 2: held up and kept growing even if it's slowed to 15 00:00:40,040 --> 00:00:43,120 Speaker 2: a core. But things look like they have changed, and 16 00:00:43,200 --> 00:00:45,839 Speaker 2: as a result, we're expecting a more noticeable jump and 17 00:00:46,000 --> 00:00:49,400 Speaker 2: unemployment to around five point one percent, and there reserve 18 00:00:49,479 --> 00:00:53,600 Speaker 2: banks expecting something closer to the around five percent as well. 19 00:00:53,760 --> 00:00:56,040 Speaker 1: Does that where do you expect it to peak? Because 20 00:00:56,040 --> 00:00:59,160 Speaker 1: there was talked midnext year it'd be five point five percent. 21 00:00:59,160 --> 00:01:00,680 Speaker 1: Now I'm hearing some people will say six. 22 00:01:02,160 --> 00:01:04,360 Speaker 2: We're expecting it will peak a bit over five and 23 00:01:04,440 --> 00:01:06,760 Speaker 2: a half percent, but somewhere around that five and a 24 00:01:06,800 --> 00:01:11,160 Speaker 2: half six percent range looks about reasonable at this point. 25 00:01:11,520 --> 00:01:13,760 Speaker 2: That would still mean it's a lower peak than what 26 00:01:13,800 --> 00:01:16,160 Speaker 2: we saw after the global financial crisis, when it was 27 00:01:16,160 --> 00:01:19,280 Speaker 2: about six and a half percent and we saw much 28 00:01:19,600 --> 00:01:21,800 Speaker 2: larger outright declines and employment. 29 00:01:22,240 --> 00:01:25,319 Speaker 1: Okay, so things will still get worse. This is not 30 00:01:25,360 --> 00:01:26,440 Speaker 1: our worst number today. 31 00:01:27,720 --> 00:01:31,720 Speaker 2: This probably hopefully this will be the last of a 32 00:01:31,760 --> 00:01:34,880 Speaker 2: big four. We do think though, that employment does risk 33 00:01:34,959 --> 00:01:38,080 Speaker 2: declining towards the end of this year, and we do 34 00:01:38,160 --> 00:01:41,560 Speaker 2: have a likely contraction and GDP to come through. But 35 00:01:41,680 --> 00:01:43,800 Speaker 2: this is starting to look in the rear vision mirror, 36 00:01:43,840 --> 00:01:45,959 Speaker 2: and as we're heading into twenty twenty five, we do 37 00:01:46,040 --> 00:01:49,040 Speaker 2: think we'll see growth starting to pick up. So those 38 00:01:49,120 --> 00:01:51,960 Speaker 2: green shoots that people have been talking about should be 39 00:01:51,960 --> 00:01:53,160 Speaker 2: starting to become noticeable. 40 00:01:53,720 --> 00:01:56,440 Speaker 1: All right, what number does the Reserve Bank need? They 41 00:01:56,480 --> 00:02:01,160 Speaker 1: were predicting five percent for unemployment today, would you know 42 00:02:01,280 --> 00:02:04,040 Speaker 1: five percent mean? And I know it's not the simple, 43 00:02:04,400 --> 00:02:06,560 Speaker 1: I'll caveat that nick, but would five percent mean of 44 00:02:06,600 --> 00:02:09,119 Speaker 1: fifty basis points? You know, would more than five percent mean? 45 00:02:09,440 --> 00:02:12,919 Speaker 1: More likely seventy five would less than five percent? Mean 46 00:02:13,200 --> 00:02:13,800 Speaker 1: twenty five. 47 00:02:15,360 --> 00:02:17,880 Speaker 2: I think if it's somewhere around five percent, give or take, 48 00:02:18,320 --> 00:02:21,640 Speaker 2: the Reserve Bank should continue to move at a fifty 49 00:02:21,720 --> 00:02:25,160 Speaker 2: point pace at this next meeting. There's a lot of 50 00:02:25,160 --> 00:02:27,800 Speaker 2: stuff in there. There's also what's happening with the wage growth, 51 00:02:28,080 --> 00:02:31,519 Speaker 2: what is happening with employment itself, That will matter as well. 52 00:02:31,760 --> 00:02:34,080 Speaker 2: But I think we're going to need to see substantially 53 00:02:34,240 --> 00:02:36,960 Speaker 2: weaker figures. And when I'm saying I'm not, you know, 54 00:02:36,960 --> 00:02:39,680 Speaker 2: you're talking about some quite material misses compared to what 55 00:02:39,760 --> 00:02:43,160 Speaker 2: Reserve Bank's expecting. For them to move by a larger amount. 56 00:02:44,000 --> 00:02:47,080 Speaker 2: Never say never, but I think the Reserve Bank would 57 00:02:47,160 --> 00:02:51,400 Speaker 2: be I think fairly comfortable move by fifty basis points 58 00:02:51,400 --> 00:02:53,320 Speaker 2: and then slow things down of it next year. 59 00:02:53,400 --> 00:02:54,840 Speaker 1: All right, Nick, thank you very much for that. We'll 60 00:02:54,840 --> 00:02:56,919 Speaker 1: look at the wage growth numbers shortly. Nick Touughley, chief 61 00:02:56,919 --> 00:03:02,440 Speaker 1: economist at ASP Bank. For more from earlier edition with 62 00:03:02,560 --> 00:03:06,840 Speaker 1: Ryan Bridge, listen live to Newstalk SETB from five am weekdays, 63 00:03:07,120 --> 00:03:09,160 Speaker 1: or follow the podcast on iHeartRadio.