The unemployment rate in New Zealand has dropped to 5.3 percent in the first quarter of 2026, down from 5.4 percent in the previous quarter. Youth unemployment, however, has risen significantly to 14.4 percent from 13.3 percent.
A total of 163,000 people were unemployed, a decrease of 2,000 from the previous quarter. The underutilisation rate remained steady at 12.9 percent. Economists noted that annual wage growth stayed at a five-year low of 2 percent.
Key statistics:
- Unemployment rate: 5.3 percent
- Previous quarter unemployment rate: 5.4 percent
- Total unemployed: 163,000
- Decrease in unemployed from previous quarter: 2,000
- Youth unemployment rate: 14.4 percent
- Underutilisation rate: 12.9 percent
- Annual wage growth percentage: 2
BNZ forecasts that the unemployment rate may peak closer to 6 percent later this year. The number of employed increased by about 4,000 in the quarter.
Nick Tuffley from ASB commented on the situation, stating, “It’s encouraging to see unemployment not creeping up, although part of that was the number of people looking for work didn’t increase.” He also highlighted the challenges faced by young job seekers.
Matt Brunt from BNZ noted that recent surveys indicate a softening in hiring intentions. This trend could impact future employment growth forecasts.
Sharon Zollner expressed concern about firms facing significant cost shocks affecting their activity and profitability.
Unemployment has been steadily rising as businesses have either laid off staff or halted hiring due to economic pressures. The impact of the Middle East conflict on the labour market remains uncertain.
