- Unemployment rises to 5.6% from 5.4%
- About 5000 jobs added in quarter, but workforce growth nearly three times that
- Underutilisation rate worsens to 13.8%; Long term and youth unemployment rises
- North Island unemployment 6%, South Island 3.7%
- Annual wage growth remains at five year low of 2 percent
- Data worse than expected
Unemployment rose to its highest level in nearly 11 years as the growth in the workforce outpaced the number of jobs being created.
Stats NZ said the unemployment rate rose to 5.6 percent in the three months ended June, from a revised 5.4 percent in the previous quarter.
A total of 171,000 people were unemployed, a rise of 7,000 on the previous quarter and 13,000 higher than a year ago.
The data was higher than most forecasts, including the Reserve Bank's estimates in May.
Unemployment has been steadily rising as businesses either sacked staff or stopped hiring because of the weak economy and uncertainty caused by the US-Iran war.
The numbers also showed a marked rise in the number of long term unemployed - those out of work for a year or more - making up about 19 percent of the total.
"Around 8,000 more people were experiencing long term unemployment in the June quarter than in the same quarter in 2025," labour stats spokesperson Abby Johnston said.
The workforce increased by 21,000.
The level of underutilisation, including the unemployed and under-employed, used as a measure of slack in the jobs market, rose to a 12 year high of 13.8 percent.
The number employed increased by about 5,000 in the quarter, and the economy had 33,000 more people in work than a year ago.
Youth unemployment up
The number of people between 15 and 24 years who were unemployed, not in education or training increased to 13.8 percent from 12.9 percent.
The regions with the highest unemployment were Northland and Auckland with rates above 6 percent, with all South Island regions below 5 percent.
The broad measure of wages showed overall growth remaining at a five year low of 2 percent, compared with a 4.1 percent rise in consumer prices.
An alternate wages measure showed a 1.1 percent rise in the average hourly rate, although there was a drop in the hours worked.
The numbers were above most forecasts, including those of the Reserve Bank.
The RBNZ has said lowering inflation back to the 2 percent target is important to foster growth and jobs.
Economists and financial markets expect the central bank to raise the official cash rate to 2.75 percent early next month as it looks to slow inflation driven the global fuel surge.