New Zealand Unemployment Rate Surges to Highest Since 2015

The New Zealand labour market surveys for the June quarter of 2026 have been released, showing a higher-than-expected unemployment rate. The unemployment rate rose to 5.6%, surpassing market and RBNZ expectations, and marking its highest reading since September 2015.

Surprisingly, employment growth was outweighed by an increase in participation, leading to mixed results from the surveys. The Labour Cost Index (LCI) showed a 0.7% rise in private sector wages and salaries for the quarter, while public sector wages were more subdued at 0.5%.

The Household Labour Force Survey (HLFS) indicated a large lift in employment, but this was accompanied by an even larger increase in labour force participation. However, other indicators, such as the Monthly Employment Indicator (MEI), suggest that labour demand may not be as strong as these figures suggest.

According to Westpac, the rise in unemployment is in line with its long-run history, and the stabilisation of wage pressures suggests a shift in justification rather than an acceleration in pay rises.