NZ Unemployment Hits 11-Year High as Wage Growth Falls Behind Inflation

New Zealand's unemployment rate climbed to 5.6% in the June quarter, its highest level since September 2015, as labour market slack widened despite modest gains in employment and participation.

Kiwibank economists pointed out a widening regional divide behind the headline figure, with Northland recording the country's highest regional unemployment rate at 8.8%, ahead of Auckland's 6.5%.

Employment rose 0.5% in the June quarter, but this was outweighed by an even larger lift in the participation rate. The underutilisation rate, which rose to 13.8%, its highest level in more than 12 years, is also a cause for concern.