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Speaker 1: Good afternoon. We have some good news on the employment front.

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Speaker 1: Despite expectations that the unemployment rate would go up, but

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Speaker 1: it's actually come and unchanged for the first three months

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Speaker 1: of the year at five point one percent. Jared kurt

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Speaker 1: Is Kiwibank's chief economist.

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Speaker 2: Ay, Jared, Hey, how are you very well?

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Speaker 1: Thank you? So can we put this down to people

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Speaker 1: not losing their jobs, but just taking fewer hours instead.

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Speaker 2: Yes, exactly, that's the main message. It's great that people

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Speaker 2: aren't losing their jobs, but total hours worked is down

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Speaker 2: three percent over the year, so that's quite a contraction.

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Speaker 1: I see that we have about twenty one percent of

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Speaker 1: the people who are in the workforce actually in part

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Speaker 1: time work. Does that seem like a high number to you?

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Speaker 2: Yeah, it is. We've seen part time work increasing as

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Speaker 2: full time work is decreasing, So businesses are clearly cutting

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Speaker 2: hours to reduce costs and fight their way through what's

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Speaker 2: quite an awkward period. And that's weighing on households, and

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Speaker 2: some households are struggling.

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Speaker 1: Can we just assume that the hours will go up

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Speaker 1: again as the economy picks up.

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Speaker 2: Yeah, and we really do need to see the economy

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Speaker 2: bounce back, and we think that happens over the second

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Speaker 2: half the year and into next year. So things will

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Speaker 2: get better, but it does take time and it will

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Speaker 2: take time for the labor market to strengthen.

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Speaker 1: Do you think that this is the height of what

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Speaker 1: we were going to reach? Like, it's not going to

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Speaker 1: go up later. We haven't delayed it.

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Speaker 2: This is it we're hoping that's the case. I mean,

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Speaker 2: our forecast was for an unemployment rate to reach about

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Speaker 2: five point three five point four. Sitting at five point

33
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Speaker 2: one is obviously better than that, but it is a

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Speaker 2: big lift from the three point two where we're at

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Speaker 2: it a year or so ago. If we peak this year,

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Speaker 2: then I think we'll see the unemployment rate falling over

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Speaker 2: twenty twenty six, which will be good news for many.

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Speaker 1: So how do you think this is going to affect

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Speaker 1: the Reserve banks decision on the ocr later in the month.

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Speaker 2: Look, we are sitting here having been through a deep recession,

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Speaker 2: with a rising unemployment rate, falling hours, all these indicators,

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Speaker 2: and the Reserve Bank still has interest rates at restrictive

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Speaker 2: levels by still restraining the economy. It's not needed. They

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Speaker 2: should be cutting aggressively. Two and a half we're at

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Speaker 2: three and a half. At the moment we were at

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Speaker 2: five and a half. We've had a decent move, but

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Speaker 2: we've got to get below three percent, which is the

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Speaker 2: believed neutral rate.

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Speaker 1: Jared is good to talk to you. Thank you so much,

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Speaker 1: Jared Kerchief Economist a Kiwibank. For more from Heather Duplessy

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Speaker 1: Allen Drive, listen live to news Talks. It'd be from

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