New Zealand Unemployment Climbs to 5.7 Percent in September Quarter
New Zealand’s unemployment rate climbed to 5.7 percent in the three months ended September, reaching its highest level in nearly 11 years, 1News reported. Statistics New Zealand released the data on Wednesday, showing a total of 174,000 people were unemployed during the period. That figure represents an increase of 3,000 from the previous quarter and is 14,000 higher than a year ago.
The latest reading surpassed most economic forecasts. Bank economists from ANZ and BNZ had projected the jobless rate to sit at 5.6 percent, while Westpac and ASB expected 5.5 percent, and Kiwibank forecast 5.4 percent, according to Interest.co.nz. The Reserve Bank had previously projected the rate would decrease slightly to 5.5 percent.
Long-Term Unemployment Reaches Levels Not Seen Since the 1990s
The data revealed a marked rise in long-term unemployment. Approximately 21.5 percent of those out of work had been searching for a job for a year or more. RNZ reported that this concentration of long-term joblessness is at its highest level since mid-1994, mirroring conditions last recorded in June 1995.
Simplicity chief economist Shamubeel Eaqub told RNZ that extended spells out of work create severe risks of “labour scarring.” When workers remain sidelined, skills atrophy, professional contacts fade, and confidence drops, making re-entry significantly more difficult. Kiwibank economists added that discouraged workers often drop out of the labour force completely or move overseas.
Total employment fell by about 4,000 during the quarter. However, annual figures show 19,000 more people in work compared to the same time last year. Statistics New Zealand labour market spokeswoman Abby Johnston noted that while overall employment levels remained steady, the structure of the workforce shifted toward more precarious arrangements. Casual and fixed-term roles increased by roughly 20 percent and 19 percent respectively over the year, alongside a quarter-on-quarter shift toward part-time employment.
Broad Labour Market Slack Stays at 12-Year High
The broader measure of labour underutilisation—which includes the unemployed, the potential labour force, and the underemployed—remained parked at 13.8 percent. Interest.co.nz reported this figure represents 438,000 people who would like to work more hours, holding at a level not seen since the December 2013 quarter.
At the same time, youth unemployment worsened. Statistics New Zealand figures showed the proportion of people aged 15 to 24 who were not in employment, education, or training increased to 14.1 percent from 13.8 percent in the previous quarter. Regional disparities persisted across the country, with Northland recording the highest unemployment rate at 8.3 percent, followed by Auckland, Waikato, and Manawatū-Whanganui with rates above 6 percent. Most South Island regions remained below 5 percent, though Canterbury experienced the largest quarter-on-quarter lift, rising 1.1 percentage points to 4.7 percent.
Wage growth remained subdued amid increasing cost-of-living pressures. The broad measure of wages showed annual growth hovering near a five-year low of 2.1 percent. An alternate take-home pay measure rose 3.3 percent, trailing the 3.7 percent inflation rate. Westpac senior economist Michael Gordon said in a note that the ongoing rise in unemployment points to more slack in the labour market than the Reserve Bank was hoping to see.
Frequently Asked Questions About the September Labour Market Data
What was the exact unemployment rate for the September quarter?
Statistics New Zealand reported the seasonally adjusted unemployment rate reached 5.7 percent for the three months ended September, up from 5.6 percent in the June quarter.
How many New Zealanders were officially classified as unemployed?
A total of 174,000 people were unemployed during the September quarter, representing an increase of 3,000 from the previous quarter and 14,000 from a year earlier.
Which region recorded the highest unemployment rate?
Northland recorded the highest regional unemployment rate at 8.3 percent, while Auckland, Waikato, and Manawatū-Whanganui all registered rates above 6 percent.