Unemployment Rate Hits 5.6%, Reserve Bank Predicts Gradual Decline

New Zealand's unemployment rate has reached its highest point in almost 11 years, hitting 5.6% in the last quarter. Despite a growing number of extra jobs being created, it failed to keep up with the growing number of people looking for work.

Reserve Bank Governor Anna Breman said there are 'encouraging signs' and expects a 'gradual decline' in the unemployment rate. However, she emphasized that the labour market remains weak, especially for young people and those who have been long-term unemployed.

The youth unemployment rate remained historically high at 25.3% for people in their late teens and 12% for people in their early 20s. Stats NZ data also shows that about 13% of young people were not in any education, employment or training, with higher numbers found in regions such as Bay of Plenty, Northland, and Gisborne and Hawke's Bay.

Auckland Business Chamber chief executive Simon Bridges said unemployment remains a very real issue for Auckland and young people. He noted that those who become 'dislocated' from the job market are more likely to remain out of work for a long period of time.