New Zealand Jobless Rate Hits Decade High Amidst Rising Participation
New Zealand's unemployment rate rose to its highest level since late 2015 as the jobless rate hit 5.6% in the June quarter, exceeding market forecasts of 5.4%. The increase was driven by a sharp rise in participation, with more people entering or re-entering the workforce than the economy could absorb.
The underutilization rate, which captures both unemployed individuals and those seeking additional hours, climbed to 13.8% from 12.9% in the previous quarter. This underscores the extent of spare capacity building in the labor market, with subdued wage growth at just 2.0%, well below the current pace of inflation.
The data arrives as a political complication for the center-right government months ahead of a general election, adding a layer of domestic political risk to the currency and rates outlook. Finance Minister Nicola Willis acknowledged the difficulty of the period, stating that April, May, and June had been challenging months for many employers.