New Zealand’s jobless rate rose to 5.4% in the December quarter, from 5.3% previously – with 165,000 people unemployed in the last three months of 2025.
The move upwards in the unemployment figure - contrary to the forecasts of economists - came as there was a meaningful rise in the 'participation rate', meaning people who make themselves available for work, to 70.5% from 70.3%.
This meant that the number of people not regarded as being 'in the workforce' dropped by 6000 during the quarter. So, in other words 6000 more people actually made themselves available for work in the quarter, which will have had a significant impact on the unemployment figures.
Meanwhile, the 165,000 unemployed people in the December quarter was a quarterly increase of 5,000 people, or 2.9%.
Unemployment rate projections from most bank economists suggested the unemployment rate would stay the same as the September quarter – holding at 5.3%. In its November Monetary Policy Statement, the Reserve Bank projected the unemployment rate would remain at 5.3% for the December quarter as well as the March 2026 quarter, before slowly reducing.
Statistics New Zealand macroeconomic spokesperson Jason Attewell said, at 5.4% in the December 2025 quarter, the unemployment rate was the highest since the September 2015 quarter when it was 5.7%.
“Over the quarter, we saw higher levels of engagement in the labour market as both employment and unemployment increased," Attewell said.
Regionally, Auckland had an unemployment rate of 6.4% for the December quarter. Waikato was at 5.9% and Wellington was at 5.8%.
Meanwhile, Canterbury had an unemployment rate of 3.7%, and Otago had an unemployment rate of 2.3%.
The so-called 'underutilisation rate' - people who would like to do more work - was 13% for the December quarter, with the number of underutilised people at 409,000 compared with 407,000 in the previous quarter.
The employment rate was 66.7% this quarter – with the seasonally adjusted number of employed people sitting at 2,886,000.
Attewell said managers (think chief executives, farmers and retail managers) and professionals (this is a large group – think teachers, nurses, engineers and marketing professionals) made up approximately half of the employed population. Each group had over 700,000 people employed.
The labour force (labour force participation is the proportion of working-age people who are engaged in the labour market through employment or unemployment) increased by 19,000 over the quarter as the working-age population increased by 14,000 to a total of 4,326,000.
The December quarter saw 20,000 more women in the labour force – 16,000 more employed and 4000 unemployed.
The growth of employed women drove a 15,000 increase in the total number of people employed in the December quarter and nationally, this was the first quarterly increase in employment since the June 2024 quarter.
The number of people not in the labour force decreased by 6000. In total, there were 1,274,000 people not in the labour force this quarter compared to 1,280,000 last quarter.
The seasonally adjusted proportion of people aged 15 to 24 who were not in employment, education or training (known as NEET) was 13.2% compared to 13.7% in the September quarter.
Annual wage inflation increased 2%. Average weekly earnings for full-time employees rose 3.7% to $1712 from $1651. This broader measure includes pay gains from job changes, promotions, and extra hours. Hourly pay rose 3.3% to $43.99 from $42.57.
New Zealand had low rates of unemployment in 2021 and 2022. However it saw a jump in December 2023, reaching 4.0% and then rising quite quickly to 5.1% by December 2024.
In 2025, the March quarter was steady at 5.1% but rose to 5.2% in the June quarter. In the September quarter, at the time, it reached the highest level in nearly nine years - rising to 5.3%.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.