Markets, Mystics and Mayhem

Inflation expectations have deflated like a balloon. But that doesn't burst our bubble. In fact, we are stoked to see the numbers going in the right direction. The Reserve Bank will be too. It won't affect their current path to 3% interest rates, but a hold in 2027 is looking more likely.
We'd love if the Reserve Bank took a holiday next year, just like the international travellers turning out in droves again. This last year to June had the highest number of tourists arriving since 2019.
Positive manufacturing index numbers for July make it a trifecta of good news. New Zealand's manufacturing index is above the long-run average. As long as we have a weak Kiwi dollar, that strength is likely to continue.

Hosted by Jarrod Kerr, Alexandra Turcu and Elliott Lowe. Follow our economic commentary & insights here https://www.kiwibank.co.nz/business-banking/thrive-hq/kiwi-economics/.
Any views or information shared in this podcast, while given in good faith, aren't necessarily the view of Kiwibank.

We have a labour market round-up this week. The unemployment rate was 5.6% for the June quarter. This lags behind the rest of the economy, so it's a reflection of where we were 6-9 months ago. That's before the strength we saw in January and February (and before the oil crisis).

Youth are the shock absorbers that take the impact when the economy hits a bump. With a 17.2% unemployment rate for those aged 15 to 24, compared to 3.5% for those aged 35 to 44. Youth unemployment has always been elevated relative to older groups, but the current level is among the highest seen in 14 years.

Overall, the picture feels bleak. Wages are not keeping up with prices (2% wage growth vs 4.1% inflation) and households are going backwards. But not all of NZ is feeling it the same way. Unemployment was 6% for the North Island compared to only 3.7% in the South Island.

Hosted by Jarrod Kerr, Alexandra Turcu and Elliott Lowe. Follow our economic commentary & insights here.

Any views or information shared in this podcast, while given in good faith, aren't necessarily the view of Kiwibank.

We take a look at an international central bank roundup. Three banks held their rates steady last week, more concerned about growth and demand destruction than inflation pressures. We agree, we'd like to see the same here.

Back home we dive into confidence data. Although the oil crisis has given both households and businesses a headache, things appear to be recovering. Albeit slowly.

We talk about some beefy topics most weeks... none more so than Kiwi beef exports and the surge in demand from the US. Just in time to save us from a drop-off in demand from China. Talk about good luck!

Hosted by Jarrod Kerr, Alexandra Turcu and Elliott Lowe. Follow our economic commentary & insights here.

Any views or information shared in this podcast, while given in good faith, aren't necessarily the view of Kiwibank.

The latest inflation data revealed some big, scary numbers. Inflation is running at 4.1%, the highest since 2023. Electricity, meat, and of course fuel prices were up sharply. However, domestic inflation finally eased, and the core measures of inflation that strip away volatile energy and food prices are a lot less frightening.

Kiwi households continue to uphold good savings habits. Although the ever soaring cost of living continues to be the biggest barrier to household savings.

Geopolitical uncertainty rages on and oil prices bounce around. Renewed conflict in the Strait of Hormuz is driving business and consumer uncertainty here in Aotearoa. One thing is certain, though, and that's Jarrod's plans to convert his home into a cattle farm.

Hosted by Jarrod Kerr, Alexandra Turcu and Elliott Lowe. Follow our economic commentary & insights here https://www.kiwibank.co.nz/business-banking/thrive-hq/kiwi-economics/.
 
Any views or information shared in this podcast, while given in good faith, aren't necessarily the view of Kiwibank.

The NZIER Quarterly Survey of Business Opinion shows that domestic trading activity remains weak, but cost pressures are still pushing higher. Kiwi businesses are reaching the end of their buffers and higher prices may just follow.

With positive net migration, we have more people arriving than leaving the country. But that's not true for Kiwi passport holders, most of whom are still heading off to Australia for better work opportunities.

One bright spot for our economy is tourism. The May 2026 data printed higher than last year - so there's hope for a good winter season (if we can get any snow). Aussies were the most likely to pop over for a visit.

Hosted by Jarrod Kerr, Alexandra Turcu and Elliott Lowe. Follow our economic commentary & insights here https://www.kiwibank.co.nz/business-banking/thrive-hq/kiwi-economics/.

Any views or information shared in this podcast, while given in good faith, aren't necessarily the view of Kiwibank.