New Zealand's unemployment rate rose to 5.6 percent in the June 2026 quarter — the highest it has been in nearly 11 years, according to Stats NZ figures released on 5 August. That was up from 5.4 percent the previous quarter. A total of 171,000 people were without a job, up 7,000 from March and 13,000 more than a year earlier (RNZ).

Wages kept rising, but only a little. Average hourly pay went up 2.8 percent to $44.62 in the year to June 2026. In the private sector, hourly pay rose 3.0 percent to $42.46. In the public sector, it increased 2.2 percent to $52.59 (Stats NZ).

Average weekly pay for full-time workers rose 3.0 percent to $1,730. Private sector weekly pay increased 3.1 percent to $1,642, and public sector weekly pay increased 2.9 percent to $2,062 (Stats NZ).

A broader measure called underutilisation also went up. This measure doesn't just count people who are unemployed — it also includes people who have jobs but want more hours, and people who would like to work but haven't been actively looking. The underutilisation rate rose to 13.8 percent, and the number of people in this category increased by 31,000 to 440,000. The number of people working fewer hours than they want rose by 9,000 to 154,000 (Stats NZ).

Stats NZ noted some technical issues with the data. The agency fixed a coding error where people who worked fewer hours than usual in late 2025 and early 2026 were put in the wrong category. A separate fix was made to a public sector pay measure, though the percentage changes were not affected. Stats NZ also changed which businesses it surveyed in the forestry, utilities and real estate industries, which means the figures for those sectors are less precise than usual this quarter (Stats NZ).

In a separate release, Stats NZ reported that 40,581 new homes were approved for building in the year to June 2026, up 19 percent on the previous year (Stats NZ).

Finance Minister Nicola Willis put out two responses to the figures — one as minister and one as the National Party's finance spokesperson. As minister, she said the government was focused on growing the economy and building business confidence, pointing to recent improvements in business confidence and hiring plans. She listed support for tourism and international education, fast-tracked construction projects, infrastructure spending, and the government's Investment Boost scheme (RNZ).

In her party spokesperson statement, Willis criticised Labour for opposing job-creation policies while claiming to care about jobs. 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. She noted he had promised to grow the economy, create jobs, and lower the cost of living (RNZ).

Green Party co-leader Chloe Swarbrick said Luxon would blame the previous government while taking on more debt to fund tax breaks that mostly benefited the wealthy. She said "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 caused by the conflict in the Strait of Hormuz and the resulting increase in fuel costs (RNZ).

The technical issues Stats NZ flagged are worth knowing about if you use these numbers. The coding error affected data from late 2025 and early 2026, and the public sector pay fix did not change any percentage figures. But the change to which businesses were surveyed in forestry, utilities and real estate means the quarterly figures for those industries are less reliable than usual.

The broader context is that wages are growing modestly — roughly in line with inflation, depending on which measure you use. But the rise in both unemployment and underutilisation at the same time suggests there is more spare capacity in the labour market than the unemployment rate alone shows. The increase of 31,000 underutilised people is much larger than the 7,000 rise in unemployed people, which means the picture is worse than the headline number suggests.

The political responses follow familiar lines. Willis releasing two separate statements — one as minister, one as party spokesperson — shows how government ministers have to balance governing with campaigning during an election cycle. Each opposition party has framed the figures to fit its own message: Labour focused on broken promises, the Greens on tax policy, and New Zealand First on an overseas conflict. None of them directly addressed the underutilisation data or the technical corrections, which are the parts most relevant to understanding what is actually happening in the labour market.