1 00:00:00,080 --> 00:00:02,199 Speaker 1: So jobs day, hot money seems to be an increase 2 00:00:02,200 --> 00:00:04,520 Speaker 1: to five point three percent. Next question is that it 3 00:00:04,880 --> 00:00:07,640 Speaker 1: have we turned the corner Marksmith as ASB senior economists 4 00:00:07,640 --> 00:00:08,240 Speaker 1: back with us. 5 00:00:08,119 --> 00:00:10,119 Speaker 2: Mark morning, Good morning mate. 6 00:00:10,119 --> 00:00:11,360 Speaker 1: Are you at five point three? 7 00:00:12,080 --> 00:00:14,159 Speaker 2: Yes, we are. Yeah, most of the market is at 8 00:00:14,160 --> 00:00:14,840 Speaker 2: the moment. 9 00:00:14,640 --> 00:00:16,479 Speaker 1: And fire point three with a view to what for 10 00:00:16,520 --> 00:00:18,480 Speaker 1: the rest of the year trending down or we don't know. 11 00:00:19,760 --> 00:00:22,480 Speaker 2: We don't know simply, but probably the risk is going 12 00:00:22,520 --> 00:00:24,639 Speaker 2: to go up for a while and it hopefully go down. 13 00:00:24,960 --> 00:00:27,280 Speaker 2: Probably The important thing to note though, is the economy 14 00:00:27,320 --> 00:00:30,160 Speaker 2: is lost in a net sense about forty thousand jobs 15 00:00:30,200 --> 00:00:33,680 Speaker 2: over the late twenty twenty three peak, and in terms 16 00:00:33,680 --> 00:00:35,880 Speaker 2: of the falls to jobs, it's been more for full 17 00:00:35,920 --> 00:00:38,800 Speaker 2: time rather than part time work. So really about labor market, 18 00:00:38,800 --> 00:00:39,960 Speaker 2: it's getting that much weaker. 19 00:00:40,120 --> 00:00:43,080 Speaker 1: Yeah, can you put that in an historical context? I mean, 20 00:00:43,159 --> 00:00:47,640 Speaker 1: how often do we go around losing forty thousand jobs recently? 21 00:00:47,760 --> 00:00:51,160 Speaker 2: Rare? Normally we do actually take on people. Now it's 22 00:00:51,200 --> 00:00:54,440 Speaker 2: pretty much the reverse is happening. In terms of the drives, 23 00:00:54,480 --> 00:00:56,680 Speaker 2: the New Zealand economy is not really copy much of 24 00:00:56,760 --> 00:00:59,240 Speaker 2: a break. We've been hit by a number of bad 25 00:00:59,280 --> 00:01:02,680 Speaker 2: news events and the accumulating at the moment, and what's 26 00:01:02,760 --> 00:01:05,320 Speaker 2: really happening is is the unemployment rate is, you know, 27 00:01:05,840 --> 00:01:09,160 Speaker 2: five point three percent the highest in twenty sixteen at 28 00:01:09,200 --> 00:01:11,080 Speaker 2: the world we've high over the next few months. 29 00:01:11,319 --> 00:01:13,640 Speaker 1: Yeah, have you changed your view on that? Because it 30 00:01:13,680 --> 00:01:15,160 Speaker 1: was a while back a lot of us were saying 31 00:01:15,200 --> 00:01:16,880 Speaker 1: five to five and I but I can't remember who 32 00:01:16,920 --> 00:01:19,959 Speaker 1: it was, but somebody got towed dangerously towards six. Then 33 00:01:20,000 --> 00:01:22,560 Speaker 1: we all seem to amend ourselves while we thought that 34 00:01:22,640 --> 00:01:24,800 Speaker 1: twenty five was going to be this utopia, which it's 35 00:01:24,840 --> 00:01:27,680 Speaker 1: not turning out to be. So have you changed your view? 36 00:01:28,800 --> 00:01:30,720 Speaker 2: I think we've changed our view in terms of how 37 00:01:30,880 --> 00:01:33,160 Speaker 2: how much the labor force is growing by now we 38 00:01:33,280 --> 00:01:36,520 Speaker 2: expect free essentially flat. I'd put that into context. The 39 00:01:36,640 --> 00:01:39,399 Speaker 2: labor market was growing without five percent a year a 40 00:01:39,440 --> 00:01:41,720 Speaker 2: couple of years ago, so it's very much the case 41 00:01:41,760 --> 00:01:45,120 Speaker 2: of much fewer people coming in. Migration is essentially slowed, 42 00:01:45,360 --> 00:01:47,600 Speaker 2: as well as the prospect to find a job as 43 00:01:47,680 --> 00:01:50,200 Speaker 2: much lower, so people are staying out of the labor market. 44 00:01:50,440 --> 00:01:53,000 Speaker 1: If we get five to three today, with a broad 45 00:01:53,120 --> 00:01:55,640 Speaker 1: feeling that it might not be over yet, what's the 46 00:01:55,760 --> 00:01:56,160 Speaker 1: RB do. 47 00:01:57,520 --> 00:01:59,640 Speaker 2: I think they'll they'll look at that certainly, but really 48 00:01:59,680 --> 00:02:01,360 Speaker 2: the thing for them or will be what's happening on 49 00:02:01,640 --> 00:02:05,080 Speaker 2: the pricing and cost sight of the economy in terms 50 00:02:05,080 --> 00:02:08,120 Speaker 2: of a higher unemployment rate. Well, that's what it really means. 51 00:02:08,320 --> 00:02:11,120 Speaker 2: There's lots of more spec capacity in the economy and 52 00:02:11,120 --> 00:02:14,160 Speaker 2: we're also seeing way to the labor cost growth slow. 53 00:02:14,600 --> 00:02:16,959 Speaker 2: We expect labor cost growth slow for the lowest in 54 00:02:17,040 --> 00:02:20,040 Speaker 2: four years. Now. What it really means is the Reserve 55 00:02:20,080 --> 00:02:23,240 Speaker 2: Bank would be more confident that inflation will converse to 56 00:02:23,280 --> 00:02:24,959 Speaker 2: two percent over next year. 57 00:02:25,240 --> 00:02:26,840 Speaker 1: Yeah, Well, the problem is of the number of the 58 00:02:26,880 --> 00:02:29,400 Speaker 1: day is too inflation is higher than two that's, in 59 00:02:29,440 --> 00:02:31,559 Speaker 1: simple Layman's terms, we're going backwards. 60 00:02:32,440 --> 00:02:35,600 Speaker 2: Well, I think what that is. Tried to look through this. 61 00:02:35,720 --> 00:02:38,760 Speaker 2: It's near term spike inflation. I think most people expect 62 00:02:38,800 --> 00:02:41,799 Speaker 2: inflations to take up to around three percent by the 63 00:02:42,480 --> 00:02:44,959 Speaker 2: second half of this year. But the real key thing is, 64 00:02:45,040 --> 00:02:48,280 Speaker 2: though there's a lot of specks the economy, wage growth 65 00:02:48,400 --> 00:02:51,240 Speaker 2: is low and as a result, we like to see 66 00:02:51,240 --> 00:02:55,200 Speaker 2: inflation cooled from around three percent by sort of later 67 00:02:55,280 --> 00:02:58,280 Speaker 2: this year to around two percent and the Reserve Bank 68 00:02:58,280 --> 00:03:01,240 Speaker 2: can look through the spike inflation, you cut the. 69 00:03:02,280 --> 00:03:04,800 Speaker 1: Good insight mark, appreciate your expertise as always, make smith 70 00:03:04,840 --> 00:03:07,160 Speaker 1: out of the ASB a good This whole looking through thing, 71 00:03:07,200 --> 00:03:09,200 Speaker 1: I mean, the RB can look through whatever they like. 72 00:03:09,360 --> 00:03:11,640 Speaker 1: We don't look through the insurance bill or the rates 73 00:03:11,680 --> 00:03:13,800 Speaker 1: bill or the POB. Wouldn't it be nice if that 74 00:03:13,880 --> 00:03:15,440 Speaker 1: just turned up in the letterbox and go, oh no, 75 00:03:15,520 --> 00:03:18,520 Speaker 1: we'll look through that. Actually. For more from the Mic 76 00:03:18,520 --> 00:03:21,639 Speaker 1: Asking Breakfast, listen live to news talks. It'd be from 77 00:03:21,720 --> 00:03:25,160 Speaker 1: six am weekdays, or follow the podcast on iHeartRadio.