Table of Contents
Summarised by Centrist
New Zealand’s unemployment rate rose to 5.4 per cent in the December quarter, its highest level in more than a decade.
At the same time, employment rose by about 15,000, the strongest quarterly increase in two years.
Despite that lift, there are still more than 30,000 fewer jobs than two years ago, reflecting the longer downturn.
The number of unemployed increased to 165,000, up 4,000 from the previous quarter and 10,000 from the year earlier.
The underutilisation rate, which includes unemployed and under-employed workers, remained at 13 per cent, the highest level since late 2020, suggesting ongoing slack in the labour market.
Youth unemployment remained elevated, with 16.5 per cent of those aged 15 to 24 out of work, though the share not in education, employment or training edged lower. Stats NZ also reported a noticeable increase in labour force participation among women, with around 20,000 joining the workforce during the quarter, many in part-time roles.
Regionally, unemployment was highest in Auckland, Wellington and Waikato, all close to 6 per cent, while South Island regions remained below 5 per cent.
Wage growth continued to ease, slowing to around 2 per cent, well below annual inflation of 3.1 per cent, reducing pressure on businesses but squeezing household incomes.
Editor’s note: Unemployment statistics can behave counterintuitively. To be counted as “unemployed,” a person must be actively looking for work. During downturns, discouraged workers often stop searching and drop out of the labour force, which can artificially lower unemployment.
When confidence improves, and people start looking again, they are counted as unemployed until they find a job. That re-entry can lift the unemployment rate even as hiring picks up during the early stages of an economic recovery.
