New Zealand Unemployment Hits Decade-High Amid Economic Worries

New Zealand's unemployment rate rose to a decade-high of 5.6% in the June quarter, surpassing market forecasts and casting a shadow on the country's economy ahead of the general election.

The data from Statistics New Zealand released on Wednesday showed that the jobless rate climbed from an upwardly revised 5.4% in the previous quarter, with employment growth beating expectations at 0.5%, but offset by a significant jump in participation rate to 70.7%.

Finance Minister Nicola Willis acknowledged the difficulties faced by many employers, saying 'For the New Zealanders who've been out there looking for work in that environment, we know it's been hard going.'

The Reserve Bank of New Zealand has indicated further rate hikes are necessary to remove stimulus from the economy and control inflation, with markets still implying a 90% chance of a hike to 2.75% at its next meeting on September 2.