New Zealand Unemployment Hits Decade-High as Reserve Bank Prepares Further Rate Hikes

New Zealand's unemployment rate climbed to a decade-high of 5.6% in the June quarter, exceeding market forecasts and sparking concerns about the economy ahead of a general election.

The data from Statistics New Zealand showed that employment growth actually beat expectations with a rise of 0.5%, but this was offset by a sharp increase in the participation rate to its highest level in over a year at 70.7%.

Finance Minister Nicola Willis acknowledged the difficult months for 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 (RBNZ) has flagged further rate hikes to remove stimulus from the economy and restrain inflation, which climbed to a 2-1/2-year high of 4.1% in the June quarter.