New Zealand's unemployment rate rose to 5.6 percent in the June 2026 quarter, its highest level in nearly 11 years, according to Stats NZ figures released on 5 August. The rate was up from 5.4 percent in the previous quarter. A total of 171,000 people were unemployed, an increase of 7,000 on the March quarter and 13,000 higher than a year earlier (RNZ).

The labour market release also showed wage growth continuing at a moderate pace. Average ordinary-time hourly earnings, as measured by the Quarterly Employment Survey, increased 2.8 percent to $44.62 in the year ended June 2026. Private sector ordinary-time hourly earnings rose 3.0 percent to $42.46, while public sector ordinary-time hourly earnings increased 2.2 percent to $52.59 (Stats NZ).

Average weekly earnings including overtime for full-time equivalent employees rose 3.0 percent to $1,730. Private sector average weekly earnings increased 3.1 percent to $1,642, and public sector average weekly earnings increased 2.9 percent to $2,062 (Stats NZ).

Underutilisation also climbed. The seasonally adjusted total underutilisation rate rose 0.8 percentage points to 13.8 percent in the June quarter. The number of total underutilised people increased by 31,000 to 440,000, and the number of underemployed people rose by 9,000 to 154,000 (Stats NZ).

Stats NZ noted several technical issues in the release. The agency corrected an error in Household Labour Force Survey processing where respondents who worked fewer hours than usual in the December 2025 and March 2026 quarters were incorrectly coded to the "Other reasons" category. A separate correction was made to the Labour Cost Index series for public sector, all industries combined, all salary and wage rates, affecting the December 2025 and March 2026 quarters, though quarterly and annual percentage changes were not impacted. Stats NZ also rotated the Quarterly Employment Survey sample for the forestry, electricity/gas/water/waste services, and rental/hiring/real estate services industries in the June quarter, increasing sampling error for quarterly movements in those industries (Stats NZ).

Separately, Stats NZ reported that 40,581 new homes were consented in the year ended June 2026, up 19 percent on the previous year (Stats NZ).

Finance Minister Nicola Willis issued two separate responses to the figures — one in her capacity as finance minister and another as the National Party's finance spokesperson. Speaking as minister, Willis said the government's focus was on policies to boost the economy and build business confidence, pointing to recent increases in business confidence and hiring intentions. She said the government was backing tourism and international education, fast-tracking major construction projects, investing in infrastructure, and promoting its Investment Boost scheme (RNZ).

In a follow-up press release as National's finance spokesperson, Willis criticised Labour's response to the figures as ranging from ambivalent to outright opposition, and said Labour could not credibly say jobs were a priority while working against job-creation policies. She also criticised Labour and its coalition partners for proposing new taxes on businesses at a time when employer confidence needed protecting (RNZ).

Labour finance spokesperson Barbara Edmonds said the figures were a damning verdict on Prime Minister Christopher Luxon's economic management, noting he had promised to grow the economy, create jobs, and lower the cost of living (RNZ).

Green Party co-leader Chloe Swarbrick said Christopher Luxon would blame the last government while taking on more debt to fund tax breaks that disproportionately benefited the wealthiest, and that "cut after cut does not grow an economy but breaks one" (RNZ).

New Zealand First leader Winston Peters said the rise in unemployment was directly attributable to the conflict in the Strait of Hormuz and the resulting increase in fuel costs (RNZ).

The data corrections and sample rotation flagged by Stats NZ are worth noting for anyone working with these series. The HLFS coding error affected the December 2025 and March 2026 quarters, and while the LCI correction did not change percentage movements, the QES sample rotation in forestry, utilities and real estate services means quarterly movements in those industries carry higher sampling error than usual. Analysts relying on industry-level quarterly shifts in those sectors should treat the June figures with appropriate caution.

The wage data tells a more measured story than the unemployment headline. With ordinary-time hourly earnings up 2.8 percent annually and private sector weekly earnings up 3.1 percent, earnings growth is running modestly ahead of or roughly in line with inflation depending on the measure used. But the simultaneous rise in both unemployment and underutilisation — 440,000 people now underutilised — points to ongoing slack in the labour market that wage growth alone does not resolve. The 31,000 increase in total underutilised people is a larger movement than the 7,000 rise in unemployment, suggesting that the deterioration in labour market conditions is broader than the headline rate captures.

The political responses, meanwhile, fall along familiar lines. Willis's decision to release separate statements as minister and as party spokesperson is itself notable: it reflects the dual track government ministers must walk in an election cycle, where governing messaging and partisan campaigning require distinct registers even when responding to the same data release. The opposition parties have each framed the figures to suit their existing narratives — Labour pointing to broken promises on growth and jobs, the Greens to tax policy and fiscal choices, and New Zealand First to an external geopolitical explanation. None of these framings engages directly with the underutilisation data or the technical corrections, which are the elements most relevant to anyone assessing the underlying state of the labour market.