Matt Nolan

September quarter HLFS: Whats with this unemployment?

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What happened in the HLFS – let me make some guesses.

So I’m guessing that quarterly employment declined this quarter – and pretty sharply, following last quarters large increase. This series is truly jumpy as hell – did the participation rate fall as well 😛

And let me guess, all the banks are saying that the fall in the participation rate is due to the “discouraged work effect” – truly they make me giggle 😀

Still, in all seriousness the increase in the unemployment rate is a true indication of where things are going – so what was it, how far over 4% has unemployment gone?

This is the series I would keep an eye on (although with annual average growth in employment – it is a slow moving indicator but less jumpy). If the unemployment rate has jumped by over half a percent (which I now expect) then this is definite sign that the labour market is softening.

Keep in mind though that the “natural” unemployment rate in NZ is 5% – as long as we are below that the labour market is still tight. I wonder how long till we cross it – March?

Note: If the unemployment rate does not rise (or falls) this is a VERY strong result – implying that our economy was on a strongish footing going into the recent credit crisis.

Will Taylor

Com Com investigating mobile termination rates

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For those of you who don’t subscribe to the Commerce Commission’s media releases, they have just announced that they are investigating mobile termination rates. (Reasons here). In simple terms, the termination rate is what vodafone charges telecom every time a telecom customer calls a vodafone customer and vice-versa. The CC has decided that the rates are probably too high so they have launched an investigation.

What is particularly interesting is that they are including Fixed to mobile (FTM) as well as Mobile to mobile (MTM) in this investigation. This is interesting because they already investigated FTM back in 2004 (see the ridiculous amount of submissions that occur ed during that investigation here). So pretty much everything is on the plate this time round. It will be interesting to see what happens:)

Agnitio

Will Taylor

Keeping it Kiwi/Asset sales

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I’m certainly glad we are keeping it Kiwi….

http://www.stuff.co.nz/4750128a13.html

At the end of the day, I feel that people don’t analyse government asset purchases or sales properly. People get fired up about asset sales and make arguments like “National sold our state assets too cheap” to support the argument that asset sales in general are a bad idea (this argument is a personal pet hate of mine). Similarly I can see people will latch on to this announcement about kiwi rail and use it as an argument that the state shouldn’t own  these assets.

People need to seperate the poor implementation of an idea from the idea itself.

Agnitio

Will Taylor

LEANZ Auckland November Seminar

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Next Law and Economics Association of New Zealand (LEANZ) seminar in Auckland:

Using the law as a last resort in policy making: challenging the ‘Working for Families’ redistributive package (Child Poverty Action Group (CPAG) v the Attorney General, 2008)

Speakers: Dr Susan St John, University of Auckland Business School

Date: Thursday 13 November 2008

Venue: Buddle Findlay, Level 18, PriceWaterhouseCoopers Tower, 188 Quay Street, Auckland

Time: 5.15 pm for 5.30 pm start, followed by refreshments

RSVP and topic details below

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Matt Nolan

Starbucks and Macroeconomic activity

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Over at 100 word blog, Richard notices an interesting phenomenon – namely that areas with more Starbucks are being more heavily hit by the credit crisis.  Now this isn’t good for NZ – as we have over 40!

Looking at this only provides us a correlation – not causation, as the Starbucks are not causing the credit crisis.  However, there may be a factor related to the number of Starbucks which is infact a causal factor for the intensity of the credit crisis.

Mentioned on 100 word blog is:

  1. It is an indication of “risk-taking industries” who use Starbucks (the “wanker” effect),
  2. It illustrates a greater national preference for current consumption ahead of future consumption (investment),
  3. It indicates more highly integrated capital markets.

I agree with all three – but especially the second one.  What do you guys think?

Will Taylor

LEANZ Seminar in Wellington: The New Zealand – China Free Trade Agreement

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The Law and Economics Association of New Zealand (LEANZ) is hosting an interesting seminar in Wellingotn next Monday on the free trade deal with China. It is being presented by some people in MFAT who were involved the behind the scenes economic and legal analysis of the deal. I (Agnitio) went to this seminar in Auckland and enjoyed it.

Seminar and RSPV details below

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