'It’s been hard going' - Nicola Willis as unemployment rises to 5.6%

New Zealand’s unemployment rate was 5.6% in the June 2026 quarter, according to figures released by Stats NZ today.

That was worse than economist expectations.

Forecasts were for the unemployment rate to land at 5.4% or 5.5%

“The unemployment rate was 5.6% in the June 2026 quarter, compared with 5.4% in the March 2026 quarter,” labour market spokesperson Abby Johnston said.

That is the highest unemployment rate since September 2015.

“The second quarter of this year was a tough one,” Finance Minister Nicola Willis said, in response to the data.

Finance Minister Nicola Willis speaking during the post-Cabinet press conference, the Beehive theatrette, Parliament, Wellington, New Zealand, August 03, 2026: Herald photograph by Mark Mitchell

“April, May and June were difficult months for many employers. They faced real uncertainty and rising costs, and a lot of them made the hard call to hold off on hiring or expanding.”

“For the New Zealanders who’ve been out there looking for work in that environment, we know it’s been hard going.”

Willis outlined Government policy moves that were aimed at boosting economic growth but warned that “none of this is about quick fixes”.

Of the 166,500 people who were unemployed in the June 2026 quarter (not seasonally adjusted), 19% had been unemployed for more than a year. Being unemployed for over a year is one measure of long-term unemployment.

“Around 8000 more people were experiencing long-term unemployment in the June 2026 quarter than in the same quarter in 2025,” Johnston said.

On a regional basis, the unemployment rate was highest in Northland at 8.8%, up from 5.1%, followed by Auckland at 6.5%. The areas with the lowest unemployment rate were Otago and Canterbury at 3.6%.

“The seasonally adjusted underutilisation rate was 13.8% in the June 2026 quarter, up from 12.9% in the March 2026 quarter,” Johnston said.

Underutilisation is a broader measure of untapped labour market capacity than unemployment.

It includes unemployed people, the potential labour force, and people who are underemployed.

The underutilisation rate reached its highest level since December 2013, when it reached 14%.

Meanwhile, the youth unemployment rate for those aged 15-19 grew to 25.3%, more than double that of any other age group.

The next highest unemployment rate was for those aged 20-24 at 12%.

“The rise in unemployment to 5.6% was larger than we and the market were expecting,” said Westpac senior economist Michael Gordon.

That followed an upward revision in the March quarter to 5.4% (previously reported as a fall to 5.3%), he said.

“Overall, we think the details are mixed from the RBNZ’s perspective,” Gordon said.

“The unemployment rate rose by more than expected, and although the employment measures were mixed, on average they support our expectation of soft growth in activity over the quarter.”

ASB economists saw some positive details in the data.

“Much attention will be given to the 11-year high in the unemployment rate,” they said.

“However, labour demand growth was evident with employment up 0.5% and 13k jobs added over the quarter.”

However, the labour supply response was stronger, with annual population growth at 1.3% and labour force participation increasing 0.3 percentage points to 70.7%.

“Improving labour demand and supply metrics are good underlying signs despite the higher headline unemployment print,” ASB said.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.