Is New Zealand's Unemployment Rate Really at 5.4%?
Synopsis
New Zealand has witnessed a notable rise in unemployment, hitting 5.4% in late 2025, raising concerns about economic stability. With increased participation in the labor market, especially among women, the implications for the economy are significant. Dive into the details of this uptick and its broader effects on households!
Key Takeaways
New Zealand's unemployment rate rose to 5.4% in December 2025.
The number of unemployed individuals reached 165,000 .
Labour force participation increased to 70.5% .
More women entered the workforce, particularly in managerial roles.
Overall living costs for households rose by 2.2% over the past year.
Wellington, Feb 4 (NationPress) The unemployment rate in New Zealand has climbed to 5.4% in the December 2025 quarter, marking the highest level since the September 2015 quarter when it was recorded at 5.7%, according to Stats NZ released on Wednesday.
Stats NZ indicated that the unemployment figure of 5.4% represents a slight increase from 5.3% in the preceding quarter, as reported by Xinhua News Agency.
Over the quarter, the number of individuals unemployed rose by 5,000 to 165,000, while both employment and labour market participation saw an increase, according to Stats NZ.
The labour force participation rate surged to 70.5%, with an additional 19,000 individuals engaging in the job market over this quarter.
Jason Attewell, a macroeconomic spokesperson from Stats NZ, remarked, "We observed a rise in labour market engagement, with both employment and unemployment figures on the rise."
Approximately 20,000 more women entered the labour force, with 16,000 securing jobs compared to the previous quarter.
Women particularly saw an increase in employment within managerial and professional roles, while clerical and administrative jobs saw a decline, as per Stats NZ.
As a whole, the employment rate stood at 66.7%, with an underutilization rate of 13%, annual wage inflation recorded at 2%, and average hourly earnings at 43.99 New Zealand dollars (equivalent to 26.59 U.S. dollars) for the December 2025 quarter.
On February 2, Stats NZ reported that the average living costs for New Zealand households escalated by 2.2% over the year leading to December 2025.
The Household Living Costs Price Indexes (HLPIs), which assess inflation's impact on New Zealand households, have shown a decline since reaching a peak of 8.2% in 2022, returning to levels last witnessed in June 2021.
The consumer price index (CPI), a comprehensive measure of inflation, increased by 3.1% during the same period.
Nicola Growden, a spokesperson for Stats NZ on prices and deflators, stated, "Interest payments for the average household decreased by 17.3% over the past year, while the cost of new home construction rose by 1.2% within the same timeframe."
HLPIs encompass interest payments including mortgages and credit cards, while the CPI covers new home construction costs.
Households relying on superannuation faced the highest inflation rate at 3.8%, largely due to rising local authority rates, electricity costs, and health insurance premiums, according to Stats NZ.
In contrast, the highest-spending households experienced the lowest inflation rate at 0.8%, attributed to an 18.6% decline in mortgage interest payments.
Rent saw a 1.9% increase over the year, remaining a major contributor to rising living costs for beneficiary and Maori households.
Point of View
I see this rise in unemployment as a critical indicator of the economic landscape in New Zealand. While an increase in participation suggests a more engaged workforce, the overall unemployment rise raises concerns. It's essential to monitor these trends closely to ensure that they do not lead to long-term economic challenges.
NationPress
21 Jun 2026
Frequently Asked Questions
What is the current unemployment rate in New Zealand?
As of the December 2025 quarter, New Zealand's unemployment rate stands at 5.4% , the highest since September 2015.
How many people are unemployed in New Zealand?
Currently, there are 165,000 unemployed individuals in New Zealand, an increase of 5,000 over the quarter.
What does the rise in unemployment indicate?
The rise in unemployment suggests potential challenges in the job market, despite an increase in overall labor market participation.
How has female employment changed?
There has been a notable rise in female employment, particularly in managerial and professional roles, with 16,000 women gaining jobs this quarter.
What are the recent trends in living costs?
Household living costs have increased by 2.2% in the year leading to December 2025, indicating ongoing inflationary pressures.
