Briefly in the news this morning in Aotearoa’s political economy around housing, poverty and climate:

* The Lead: The NZIER’s September quarter survey of business confidence found a slump in expectations about the wider economy and businesses’ own activity in the next three months. Businesses reported they shed more staff during the quarter and were no more confident about employing more in the December quarter.

* The Sidebar: The survey results increased the chances the Reserve Bank would cut the Official Cash Rate (OCR) by a ‘bazooka’-sized 50 basis points to 2.5% at 2pm today, rather than the 25 basis points most economists had previously expected. The Kiwi dollar fell 0.6% to 58.07 USc and one-year wholesale interest rates fell three basis points to 2.51% yesterday. BNZ and TSB cut more fixed mortgage rates late yesterday to bring them into line with the others.

* The Scoop of the Day is from Susan Edmunds at RNZ documenting that about 3000 people receive NZ Super who are not yet 65, and three who are under 30.

* The Investigation of the Day is from Paula Penfold at Stuff on the human misery caused by gambling.

* The Deep-Dive of the Day is from Layla Bailey-McDowell for RNZ on what youth homelessness experts in Auckland are saying about the Jobseeker changes.

* The Interview of the Day is by Pheobe Utteridge for Stuff with jobless man Robert Purchase, who has applied for 8,000 jobs in two years. It’s all about clean slate reform on past convictions.

Subscribe in full as a paying subscriber for more detail and analysis in the full video and podcast above. There’s a two-minute free preview for browsers. Paying subscribers support my work being done in the public interest here and via my appearances on other media such as RNZ & 1News. Paying subscribers also get early and full access to our webinars, our chat room, my morning ‘Early Bird’ post with the full ‘Picks n’ Mixes’ digests of news links, and can comment on articles.

The Lead: Economy ‘stuck in the mud’

The news from the economy got worse for the Government yesterday. It will be praying for the Reserve Bank to cut the Official Cash Rate by 50 basis points at 2pm. That’s seen as more likely after a dire business confidence survey for the September was released yesterday by the NZIER.

It found a slump in expectations about the wider economy and businesses’ own activity in the next three months. Businesses reported they shed more staff during the quarter and were no more confident about employing more in the December quarter.

“The economy may have turned a corner, but we are failing to gain traction to get out of this hole - the wheels are spinning in the mud.” ASB Senior Economist Jane Turner on the QSBO survey.

The survey found:

* Businesses reporting lower activity in the three months, with a net 14% down in Q3 vs a net 22% down in Q2;

* Business expectations about the next three months worsened, with a net 9% expecting improvement vs the net 18% who said in Q2 they expected improvement in Q3;

* Yet again, the actual experienced activity (-14%) was much worse than expected (+18%);

* Businesses reported shedding jobs in the last quarter, with a net 23% cutting workers, up from a net 12% cutting jobs in the June quarter;

* Business expectations for hiring in the next quarter was stuck at a net 4% expecting to hire more;

* Outcomes for jobs in Q3 (-23%) were again much worse than the +4% expected for the quarter when businesses were surveyed in Q2.

* Investment intentions for plant & machinery deteriorated to -13% vs +8% in the June quarter

* Investment intentions for buildings slumped to -20% vs -1% in the June quarter.

The Sidebar: The dire QSBO makes 50 bps more likely

The survey results increased the chances the Reserve Bank would cut the Official Cash Rate (OCR) by a ‘bazooka’-sized 50 basis points to 2.5% at 2pm today, rather than the 25 basis points most economists had previously expected.

The Kiwi dollar fell 0.6% to 58.07 USc and one-year wholesale interest rates fell three basis points to 2.51% yesterday. BNZ and TSB cut more fixed mortgage rates late yesterday to bring them into line with the others.

“More support is needed, the RBNZ needs to get there faster and deliver a 50 basis point cut or risk delivering the stimulus too late to matter to households and businesses. We expect a follow up cut of 2.25% in November.” ASB Senior Economist Jane Turner in a note.

Chart of the day: Worse than during Covid

My Picks n’ Mixes of links elsewhere

Top Pick n’ Mix Six

* The Lead: Mandy Te for Interest: Economy ‘spinning in the mud’ - 50 point cut to the OCR ‘needed’

* The Sidebar: Gyles Beckford for RNZ: Weaker business survey tips odds towards bigger rate cut

* Scoop of the day: Susan Edmunds for RNZ: The 20-somethings getting the pension

* Investigation of the day: Paula Penfold for Stuff: ‘Gnawing on dog bones to survive’: The lonely addiction where no one ever wins

* Deep-dive of the day: Layla Bailey-McDowell for RNZ: Jobseeker changes ‘out of touch’, youth homelessness group warns

* Interview of the day: Pheobe Utteridge for Stuff with jobless man Robert Purchase: Almost 8000 applications, no job: Man still haunted by what he did 28 years ago

Full paying subscribers can see the full list of Picks n’ Mixes in my Early Bird post on Substack this morning.

Cartoon of the Day: A teaching moment

Timeline-cleansing nature pic

Ka kite ano

Bernard

PS: Here is the PDF of my presentation in the Chorus video above.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe