Unemployment low, wages grow
New unemployment and wage growth data likely to prompt another rise in the OCR.
Mōrena and welcome to The Bulletin for Thursday, May 5, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: role of social media to be probed; change for hospital waiting lists; divorce rates didn’t do what some expected; but first, employment and wage figures.
Wage inflation grows to highest level since March 2009 (Photo: Getty Images)
Unemployment rate stable but still at 16-year low
Stats NZ released its quarterly Household Labour Force Survey (HLFS) results yesterday for the period between January 1 and March 31 this year. The unemployment rate remained at 3.2% which is still the lowest it’s been since 1986, the year GST was introduced and “Sailing Away” was released. Speaking to RNZ’s Midday report, Jarrod Kerr, chief economist at Kiwibank thinks the unemployment rate could continue to drop.
Wage growth likely to accelerate
Wage inflation also grew. It’s at 3%, the highest level since the March quarter in 2009. Kerr thinks wage growth will accelerate further. He puts this down to the tight labour market and the departure of New Zealanders to live and work overseas. Australia’s jobless rate is at 4%, near its lowest level in almost 50 years. The minimum wage in New Zealand was also lifted on April 1 from $20.00 to $21.20 per hour. Wage growth didn’t out-strip the rate of inflation, which hit 6.9% recently meaning it’s not keeping pace with the cost of living. Kerr thinks inflation may ease by next year while wage growth will continue.
Economists pick another lift in the official cash rate
Many economists are predicting that this data will prompt a lift in the official cash rate from 1.5% to 2% later this month as the Reserve Bank attempts to offset a wage-price spiral. It’s the “mouse wheel” that economist Cameron Bagrie flagged in April where rising wages create more disposable income, lift demand and cause prices to increase. The Federal Reserve in the US lifted its benchmark interest rate by half a percentage point to a 22-year high this morning.
Low unemployment not a win for everyone
In February, Jono Milne at Newsroom wrote an interesting long-read on the winners and losers in this new world of so-called full employment. He concluded that “a return to the highest levels of employment we've seen since the early Muldoon era also equates to a loss of labour market flexibility that invigorates businesses and their employees alike.” Newsroom’s Matthew Scott has since taken a look at the Stats NZ household living-costs price indexes which, unlike the consumer price index, take interest payments into account. For many households, home loan interest payments are now the biggest increasing cost.
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Role of social media to be included in Christchurch massacre coronial inquiry
Reversing an earlier decision, the scope for the coronial inquiry into 51 deaths at two Christchurch mosques in March 2019, will now consider whether online platforms played a material role in radicalising the terrorist. A range of groups in the Muslim community had urged the scope be extended to include the role of social media. Aliya Danzeisen of the Islamic Women’s Council of NZ has hailed the decision as “a landmark moment for the accountability of digital platforms”. The coroner had also been asked to investigate whether intelligence and counter-terrorism agencies missed any opportunities to prevent the attack but coroner Brigette Windley said that was outside her scope.
Hospital waiting lists will now be managed nationally
The shift, announced by minister of health Andrew Little yesterday, is a bid to reduce waiting times which have gotten longer as hospitals deal with the omicron outbreak. Patients could be flown to other regions if they could not be treated at their own hospital. It comes ahead of the health reforms which will introduce further centralisation. A special task force will help hospitals create short-term solutions and deliver a national plan by September. There’s no indication yet of when it might be operational so we will need to see how it helps people like Ray who’s been waiting nine months for a hip replacement. The Association of Salaried Medical Specialists’ Sarah Dalton said “trucking people around was a band-aid solution in place of properly resourced services”.
Parliamentary trespass story peters out
Winston Peters told Breakfast on Wednesday morning that he was seeking a judicial review of the trespass order he received on Tuesday. Speaker Trevor Mallard withdrew five of the orders on Wednesday afternoon including ones against Peters and former National MP Matt King. Both Jacinda Ardern and Chris Hipkins questioned the proportionality of the response, noting the difference between people throwing bricks and those just turning up (as Peters did). Peters called it a shambles from start to finish.
“A bit like an arranged marriage”
The relationship between investors and investees is a pretty crucial one, but how well does it actually work? Season three of NZTE’s Investment Fix podcast series has launched, and this time around they’re looking to answer exactly that question. Over five episodes, Dylan Lawrence, NZTE’s GM of Investment, joins the founders and CEOs from Mint Innovation, Narrative Muse, Natural Pet Food Group, SafeStack and Yellow Brick Road, as well as some of their key investors, for a series of candid and frank discussions around what works, what doesn’t, and what they’ve learned. From venture capital and private equity firms to angel and Māori investors, the season takes in a broad range of voices, environments and perspectives – and there’s also a special bonus episode featuring venture capital guru and Silicon Valley legend Randy Komisar. Listen now on Apple or Spotify, or head to the NZTE website to learn more. (Sponsored)
The “great separation” not joining the “great resignation” just yet
Stats NZ also released divorce rate data for 2021 yesterday. I’ve read a few articles over the last year seemingly anticipating a great leap in divorce rates. I can not think why. But divorce is not set to be another pandemic era trend just yet. Divorce rates are at the lowest they’ve been since 1979. There was a brief blip in 2019 when they rose again but the rate for 2021 reflects a general downward trend. It’s probably not a “hooray for marriage”, however, with Hamish Slack at Stats NZ saying it likely reflects less societal pressure to get married in the first place.
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz
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New Black Ferns captain named
Ashley Stanley at LockerRoom profiled new Black Fern’s captain Ruahei Demant in 2020. At the time, Demant was in her final semester of a law and arts degree with the aspiration of being a sports lawyer. Demant was named as captain yesterday in the first team naming since the new coaching trio of Wayne Smith, Wesley Clarke and Whitney Hansen took over. Several experienced players including Les Elder, Eloise Blackwell and Renee Wickliffe weren’t named but Smith said he wanted them “to be in the best possible condition to be selected for Rugby World Cup”.
Editor's note: After a couple of emails from dedicated subscribers concerned the sports news had been dropped under the new Bulletin regime,, I have returned it to its original position here. It has been included most days, but in the main story list. An unforced error on my part.
