New Zealand’s job market is under mounting pressure, with the unemployment rate rising to 5.4 percent – the highest level in more than a decade, according to the latest labour market figures from Stats NZ. This marks a further climb from 5.3 percent in the previous quarter and pushes unemployment to levels not seen since 2015.
The Stats NZ data shows that while more jobs were added in the three months to December – around 15,000 positions – the number of people looking for work grew even faster. That imbalance meant 165,000 New Zealanders were without a job, up 4,000 from the previous quarter and 10,000 compared with a year ago.
Economists say the figures were worse than expected, with the Reserve Bank of New Zealand forecasting a lower unemployment rate. The broader labour underutilisation rate – which includes those unemployed and under-employed – held at 13 percent, a five-year high.
Youth unemployment remains a concern, with those aged 15-24 experiencing a rate well above the national average, and a notable uptick in the number of wāhine entering the labour force, many in part-time work.
While the headline figures paint a challenging picture, some analysts point to underlying resilience: employment growth occurred alongside rising workforce participation, suggesting people are actively seeking work rather than leaving the labour market entirely.
However, slower wage growth – near 2 percent annually, one of the lowest rates in several years – highlights ongoing pressure on household incomes, especially with living costs rising faster than wages.
The hardest hit regions include Auckland, Wellington and Waikato, with unemployment rates close to 6 percent, while all South Island regions remain below 5 percent.
Political voices have responded quickly. Opposition parties argue the figures underscore economic strain under the current government, while the Labour Party has criticised the Government’s record on job creation. Government representatives, including the Finance Minister, have pointed to the mixed data – with job growth alongside rising unemployment – as evidence of a transitional labour market.
As the labour market slows and more Kiwis seek work, economists and community leaders say there will be close attention on upcoming economic policy decisions, wage pressures, and targeted support for sectors and communities most affected by job losses.
