Unemployment rate rises to 5.7%

Posted by Andrew on November 3, 2026

New Zealand’s unemployment rate has risen to 5.7% in the September 2026 quarter, according to figures released by Stats NZ today, out of line with economists’ expectations. Forecasts were for the unemployment rate to be 5.4% or 5.5%.

For men, the unemployment rate was unchanged at 5.6%, while the rate for women rose from 5.5% to 5.7%.

The seasonally adjusted number of unemployed people was 174,000, compared with 171,000 in the June 2026 quarter. That’s equivalent to the population of Hamilton, according to the most recent Census.

Stats NZ labour market spokeswoman Abby Johnston said employment remained similar to the June 2026 quarter.

“Although employment was similar to last quarter, there were changes in how people were employed,” Johnston said. “Casual and fixed-term roles increased over the year, while there was a shift towards part-time employment over the quarter.”

The underutilisation rate, a broader measure of untapped labour market capacity than unemployment, was unchanged at 13.8%. It includes unemployed people, the potential labour force, and people who are underemployed. The underutilisation rate was at its highest level since December 2013, when it was 14%.

In the September 2026 quarter, the seasonally adjusted proportion of people aged 15 to 24 years who were not in employment, education or training (Neet) was 14.1%, compared with 13.8% last quarter.

Westpac senior economist Michael Gordon said in a note that unemployment rose against expectations, continuing an almost five-year run of increases. “The message on the jobs market remains weak: to the extent that employment may be rising, it’s still not fast enough to absorb the growth in the population (which is itself a fairly low bar, as net migration remains at a relatively low ebb),” Gordon said. Wage growth remains subdued despite increasing cost-of-living pressures.

“The ongoing rise in unemployment points to more slack in the labour market than the Reserve Bank was hoping to see in an economy that has been growing for over a year now.

“The doves on the policy committee will be encouraged in their view that there is limited scope for headline inflation shocks to pass through into second-round effects.”

On a regional basis, the unemployment rate was highest in Northland at 8.3%, down from 8.7% in the June quarter. The unemployment rate was next-highest in the Auckland, Waikato and Manawatū-Whanganui regions at 6.3%. Canterbury reported the largest quarter-on-quarter lift, up 1.1% or roughly 5000 people to 4.7%. The area with the lowest unemployment rate was Otago at 3.3%.

Thanks to the NZ Herald for this story.