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Comments on: Another sign that our labour market is surprising? http://www.tvhe.co.nz/2009/02/10/another-sign-that-our-labour-market-is-surprising/ The Visible Hand in Economics Tue, 10 Feb 2009 02:08:37 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Miguel Sanchez http://www.tvhe.co.nz/2009/02/10/another-sign-that-our-labour-market-is-surprising/#comment-13532 Tue, 10 Feb 2009 02:08:37 +0000 http://www.tvhe.co.nz/?p=2832#comment-13532 Hmmm… how much are you paying, Bernard?

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/02/10/another-sign-that-our-labour-market-is-surprising/#comment-13523 Tue, 10 Feb 2009 00:03:57 +0000 http://www.tvhe.co.nz/?p=2832#comment-13523 Thanks.

The labour market is THE essential element in the current economic situation. GDP could fall for the next three years, but if unemployment stays below 7% (with 5% as neutral) I’m not sure there is the role for government intervention.

I would also note that the RBNZ could justify current interest rates on the basis that they believe that the natural rate of growth will be weak over the medium term – if they expect 1% growth (so growth solely from rising population) and underlying inflation of 2.5% then 3.5% is really neutral. However, this is a relatively bleak view if that is what they believe.

These labour market figures were a surprise – the labour market is taking its time to show weakness. If labour can move from consumption oriented industries to export/production focused industries in NZ then we will be in good shape – I expect an increase in demand for polytech courses as people update skills.

Good luck finding a data analyst – hopefully when people start coming back from overseas you’ll be able to pick someone up.

]]> By: Bernard Hickey http://www.tvhe.co.nz/2009/02/10/another-sign-that-our-labour-market-is-surprising/#comment-13513 Mon, 09 Feb 2009 20:56:50 +0000 http://www.tvhe.co.nz/?p=2832#comment-13513 Great post Matt. I am amazed that our OCR is 3.5% and falling while our unemployment rate is still below 5%. Without that rise in the participation rate it may not have risen above 4.5% in the December quarter.
There is a lot of hoarding going on and we still have a tight labour market. We’ve been looking for a data analyst for months with no luck.
cheers/bernard

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