New Zealand’s jobless rate rose to 5.6% in the June quarter, the highest it has been for more than a decade, with 166,500 people unemployed in April, May and June.
“The unemployment rate was 5.6% in the June 2026 quarter, compared with 5.4% in the March 2026 quarter,” Statistics NZ’s labour market spokesperson Abby Johnston said on Wednesday.
The seasonally adjusted 5.6% figure is the highest unemployment rate since March 2014. The 166,500 number of people who are unemployed is not seasonally adjusted.
The jobless rate in the March quarter was revised up from 5.3% to 5.4%, due to some of the data being seasonally adjusted and the inclusion of more up-to-date migration estimates.
“Around 8000 more people were experiencing long-term unemployment in the June 2026 quarter than in the same quarter in 2025,” Johnston said.
This latest unemployment figure was well above the projections made by the Reserve Bank (RBNZ) and by bank economists.
BNZ and Westpac picked 5.4%, ANZ and ASB anticipated an increase to 5.5% and Kiwibank projected 5.3%. Meanwhile, the Reserve Bank (RBNZ) projected the jobless rate would increase slightly, to 5.4%. In its May Monetary Policy Statement, the RBNZ projected the unemployment rate would “remain near this level until mid-2027”.
The people who would like to do more work
The increase in the unemployment figure comes as the data shows a rise in underutilisation to 13.8% from 12.9% – this is a broad measure of untapped labour market capacity and includes unemployed people, the potential labour force and people who are underemployed. To put more simply, it’s people who would like more work.
The last time the underutilisation rate was around this level was in the December 2013 quarter, when the rate was 14%.
In the June quarter, there were 440,000 underutilised people, increasing from 408,000 in the March quarter.
The rise in underutilisation includes an estimated 8000 unemployed people, bringing that total to 171,000 while 9000 people were underemployed – bringing the total of underemployed people to 154,000. Meanwhile, there were 14,000 people in the potential labour force category, bringing that total to 115,000.
Young people, by age group, experienced largest increase in underutilisation over the past year
Young people continue to struggle – with Stats NZ’s data showing that by age group, youth experienced the largest increase in underutilisation in the year to the June quarter.
For 15 to 24-year-olds, the underutilisation rate rose from 33.6% to 37.0% over the year. The number of underutilised people in this age group jumped 21,500 annually – with the largest increase in underutilisation coming from unemployment.
The underutilisation rate for people in the 25 to 34 age group also increased – going from 9.7% to 11.6% with the number of underutilised people in this group rising 11,900 over the year.
For the 25 to 34 age group, the main contributor to rising underutilisation came from underemployment, which was up 6600 annually.
In the June quarter, 25.8% of underutilised people were Māori with the Māori underutilisation rate sitting at 22.8%. This rate was up 3.2% over the year.
Young people who were not in employment, education or training (NEET) was 13.8% in the June quarter, down from 14.4% in the March quarter.
Employment and participation
The jobless rate in the North Island increased to 6.0% from 5.3% a year earlier. In the South Island, the unemployment rate was 3.7% in the June quarter.
When it came to the employment rate – this was at 66.7% in the June quarter, largely unchanged from the previous quarter. This shows the seasonably adjusted number of employed people was sitting at 2,905,000 people were employed compared to 2,892,000 in the March quarter.
The participation rate (labour force participation is the proportion of working-age people who are engaged in the labour market through employment or unemployment) was 70.7% in the June quarter, compared to 70.4% in the March quarter.
Annual wage inflation increased 2%. Average weekly earnings for full-time employees rose 3.0% to $1730 from $1679. This broader measure includes pay gains from job changes, promotions, and extra hours. Hourly pay rose 2.8% to $44.62 from $43.39.
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.
The unemployment rate hasn’t been below 5% since September 2024. The last time it dipped below 4% was in September 2023.
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