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 — up 7,000 on the March quarter and 13,000 higher than a year earlier (RNZ).

Wages kept growing, but only modestly. Average ordinary-time hourly earnings rose 2.8 percent to $44.62 in the year to June 2026, according to the Quarterly Employment Survey. Private sector hourly earnings were up 3.0 percent to $42.46, while public sector 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).

The underutilisation rate also climbed — up 0.8 percentage points to 13.8 percent. Underutilisation is a broader measure than unemployment: it captures not only people without work but also those who are working fewer hours than they want to and people available for work but not actively looking. The number of underutilised people rose by 31,000 to 440,000, and the number of underemployed people rose by 9,000 to 154,000 (Stats NZ).

Stats NZ flagged several technical issues in the release. The agency corrected a coding error in the Household Labour Force Survey where people who worked fewer hours than usual in the December 2025 and March 2026 quarters were wrongly sorted into an "Other reasons" category. A separate correction was made to the Labour Cost Index for the public sector, affecting the December 2025 and March 2026 quarters, though percentage changes were not affected. Stats NZ also rotated its Quarterly Employment Survey sample for the forestry, electricity/gas/water/waste, and rental/hiring/real estate industries, which means quarterly movements in those sectors carry higher sampling error than usual (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 responses — one as minister, one as the National Party's finance spokesperson. As minister, Willis said the government's focus was on boosting the economy and building business confidence, pointing to recent increases in business confidence and hiring intentions. She cited backing for tourism and international education, fast-tracking major construction projects, investing in infrastructure, and promoting the government's Investment Boost scheme (RNZ).

In her party spokesperson press release, Willis criticised Labour's response to the figures as ranging from ambivalent to outright opposition. She said Labour could not credibly claim jobs were a priority while working against job-creation policies, and criticised Labour and its coalition partners for proposing new taxes on businesses 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 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 technical issues flagged by Stats NZ matter for anyone working with these figures. The Household Labour Force Survey coding error affected the December 2025 and March 2026 quarters, and the Labour Cost Index correction did not change percentage movements. But the Quarterly Employment Survey sample rotation in forestry, utilities and real estate means quarterly shifts in those industries carry higher sampling error than usual. Analysts relying on industry-level quarterly changes in those sectors should treat the June figures with appropriate caution.

The broader context here is that 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 larger than the 7,000 rise in unemployment, suggesting 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 walk in an election cycle, where governing messaging and partisan campaigning require distinct registers even when responding to the same data. 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.