Rate: Unemployment in New Zealand shows slight decrease but youth unemployment rises
The unemployment rate in New Zealand has slightly decreased to 5.3 percent in the first quarter of 2026, down from 5.4 percent the previous quarter. However, youth unemployment has risen significantly, now standing at 14.4 percent, raising concerns about the challenges young job seekers face.
According to Stats NZ, a total of 163,000 people were unemployed, reflecting a decrease of 2,000 from the previous quarter. Despite this positive trend in overall unemployment, the rise in youth unemployment signals deeper issues within the labour market.
The underutilisation rate remained steady at 12.9 percent, while annual wage growth stagnated at a five-year low of 2 percent. Economists are closely monitoring these figures as they suggest a complex economic landscape ahead.
Nick Tuffley from ASB commented on the situation, stating, “It’s encouraging to see unemployment not creeping up, although part of that was the number of people looking for work didn’t increase.” This indicates that while fewer individuals are unemployed, many may be discouraged from seeking employment altogether.
However, Tuffley also expressed concern over youth employment: “The high level of youth unemployment and those not in training or education showed how tough it was for young people to get into the jobs market.” This highlights a critical issue that needs addressing.
BNZ forecasts indicate that unemployment could peak closer to 6 percent later this year as businesses grapple with various economic pressures. Matt Brunt from BNZ noted that recent surveys show softening hiring intentions among firms.
Sharon Zollner from ANZ Bank added that firms are understandably concerned about their activity and profitability amid significant cost shocks. The impact of external factors—like the ongoing conflict in the Middle East—on New Zealand’s labour market is still not fully known.
The latest employment data paints a mixed picture: while overall numbers seem stable, the rising youth unemployment calls for urgent attention and action from policymakers and community leaders alike.
