New Zealand's unemployment rate rose to 5.6 percent in the June 2026 quarter, the highest in nearly 11 years, according to Stats NZ figures released this week. The rate was up 0.2 percentage points from the March quarter, with 8,000 more people unemployed, bringing the total to 171,000.

The underutilisation rate — a broader measure that includes people who are working but want more hours, plus those available for work but not actively looking — also rose, up 0.8 percentage points to 13.8 percent. The total number of underutilised people increased by 31,000 to 440,000. Of those, the number of underemployed people (working but wanting more hours) rose by 9,000 to 154,000.

The figures show a labour market that has been gradually weakening. A year ago, in the June 2025 quarter, the unemployment rate was 5.2 percent. It ticked up to 5.3 percent in September, 5.4 percent in December 2025, dipped slightly to 5.3 percent in March 2026, and has now reached 5.6 percent.

Finance Minister Nicola Willis, speaking on RNZ's Morning Report political panel before the figures were released, described the last quarter as a "very difficult three months" but said data was beginning to point in "another direction" (RNZ). She pointed to increased tourism numbers, more international students, Fast Track Consents (the government's streamlined approvals process for infrastructure and development projects), free trade agreements, and changes to the Holidays Act and Health and Safety Act as policies aimed at lifting employer confidence.

Willis named high inflation and interest rates, global tariffs and an oil shock as factors behind what she called a difficult economic recovery. Her tone has shifted from earlier ministerial statements. In August 2025, she highlighted unemployment being "lower than forecast" at 5.2 percent (Beehive). In February 2026, she welcomed 15,000 additional jobs while noting the rate had risen to 5.4 percent, fractionally below Treasury's 5.5 percent forecast (Beehive).

On welfare changes, Willis confirmed that from November 2026 a parental assistance test will apply to people on Jobseeker benefits and equivalent emergency benefits. Parents earning more than $65,000 will be required to support their 18 to 19-year-old children. The government is also tightening eligibility for Jobseeker benefits more broadly. Around 14 percent of young people in Aotearoa were not in work, training or education.

Labour deputy leader Carmel Sepuloni, on the same panel, accused the government of an "actual disregard" for struggling families. She pointed to Labour's expanded employer support policy for apprentices, set to begin in July 2028, and the party's Future Fund initiative. Sepuloni said Labour would not have paused major infrastructure projects, would have invested in the health system, and would not have directed money into tax breaks for landlords and the tobacco industry. She said Labour's manifesto, including job creation modelling for the New Zealand Future Fund, would be released in the coming weeks.

Willis denied the accusation, saying the government "absolutely" cared about struggling people.

On wages, Stats NZ's Quarterly Employment Survey reported average ordinary time hourly earnings (that is, earnings for standard hours worked, excluding overtime) of $44.62 for the year ended June 2026, up 2.8 percent. Private sector hourly earnings rose 3.0 percent to $42.46; public sector hourly earnings rose 2.2 percent to $52.59. Average weekly earnings including overtime for full-time equivalent employees rose 3.0 percent to $1,730. Private sector weekly earnings rose 3.1 percent to $1,642; public sector weekly earnings rose 2.9 percent to $2,062.

Stats NZ also corrected an error affecting Household Labour Force Survey data on reasons people worked fewer hours than usual in the December 2025 and March 2026 quarters. The QES sample was rotated in the June 2026 quarter for forestry, electricity, gas, water, and waste services, and for rental, hiring, and real estate services.

The broader context here is that unemployment has risen in four of the last five quarters, and the 5.6 percent figure is the highest since 2015. For a government that campaigned on economic management, the headline is uncomfortable. Willis's turn toward forward indicators — tourism, consents, trade deals — is a deliberate reframing: the argument is that the economic cycle has turned even though the labour data has not yet caught up. Whether that holds will depend on the September quarter numbers. For Labour, the political opening is clear, and Sepuloni's emphasis on apprenticeships, infrastructure and the Future Fund signals the lines of attack the opposition will run through to the election. The welfare tightening, including the parental income test from November, gives Labour another angle: that the government is making life harder for beneficiaries at the same time as unemployment climbs. Both parties, in other words, are now talking past each other on the same set of numbers.