New Zealand unemployment hits 5.7 percent as job market cools
New Zealand's jobless rate reached an 11-year high of 5.7 percent, with 174,000 people out of work and wage growth slowing.
Market · Source: Reuters
What happened
New Zealand's unemployment rate rose to 5.7 percent in the third quarter of 2026. This is the highest level since 2015. The total number of unemployed people reached 174,000, which is an increase of 3,000 from the previous three months. Overall employment also fell by 0.1 percent from the prior quarter, and the participation rate slipped to 70.4 percent.
The job market cooled faster than experts predicted. Economists and the Reserve Bank of New Zealand expected the unemployment rate to stay at 5.5 percent. Wage growth is also slowing down. Reuters reports annual wage growth eased to 2.0 percent, while Chris Lynch Media cites 2.1 percent. At the same time, the broader underutilization rate stayed high at 13.8 percent.
These numbers arrived right before a tight general election on November 7. Prime Minister Christopher Luxon faces criticism from the Labour Party over his economic management. Labour points out that unemployment was 3.9 percent when they left office in 2023. The current government defends its record, citing high oil prices and election uncertainty as reasons businesses are cautious about hiring.
By the numbers
- 5.7% — New Zealand's unemployment rate in the third quarter of 2026.
- 174,000 — The total number of unemployed people in the September quarter.
- 13.8% — The underutilization rate, capturing those without enough work hours.
- 2.75% — The official cash rate kept unchanged by the central bank.
Why it matters
A cooling job market means longer search times for workers. Businesses are cautious about hiring due to high costs and economic uncertainty. This makes it harder for job seekers to find stable, full-time roles that cover the rising cost of living. Even when people find work, slowing wage growth means their paychecks struggle to keep pace with inflation.
The weak labor market is acting as a lid on price growth. This could stop the central bank from raising interest rates again. The Reserve Bank recently kept the official cash rate unchanged at 2.75 percent. While stable interest rates help the broader economy, the immediate reality for workers is fewer job openings. The Labour Party has promised to return the central bank to a dual mandate that considers both price stability and maximum sustainable employment if elected.
Who this hits
Young workers
Data shows 91,000 young people are currently not in employment, education, or training. This group faces a tough entry into a tightening labor market where companies are hesitant to hire and train new staff.
Māori and Pacific workers
These communities are experiencing much higher joblessness compared to the national average. Unemployment reached 10.9 percent for Māori and 11.5 percent for Pacific peoples, showing an unequal impact of the economic slowdown.
Underemployed workers
The underutilization rate sits at 13.8 percent. This means many people have jobs but cannot get enough hours to meet their financial needs, leaving them struggling to cover bills despite being technically employed.
What to do this week
- Focus your search on companies tied to approved infrastructure projects. The government projects that 37 fast-track projects could support around 70,000 jobs.
- Look for contract or part-time work to maintain income if full-time roles are scarce. The high underutilization rate shows many are taking partial hours while they keep applying for permanent positions.
- Highlight your ability to help companies operate efficiently. Businesses are currently managing high costs and slow growth, so candidates who can save money or improve processes will stand out.
See who's hiring right now on GiraffyReach
My take
I see a clear slowdown in hiring when I look at these numbers. When unemployment rises and wage growth stalls, job seekers feel the pressure directly. Focus on building skills that companies need right now, even in a tight economy.