NZ jobless rate hits 5.7% in Q3 2026

New Zealand’s unemployment rate rose to 5.7% in the third quarter of 2026, reaching its highest level since the third quarter of 2015 and exceeding expectations of 5.5%. Statistics New Zealand data show this was the third consecutive quarterly increase in joblessness, following rates of 5.6% in the June quarter and 5.4% in the March quarter. The number of unemployed reached 174,000 people, with the increase occurring despite fewer people participating in the labour market.

The outcome surprised forecasters who had generally anticipated either a slight decline or a stable unemployment rate. The June quarter reading of 5.6% had already marked the highest rate since 2015, and the further rise to 5.7% underscored a continuing softening in labour market conditions through 2026.

Overall employment fell 0.1% in the quarter, against expectations of a 0.4% increase. There were 2,891,000 people employed in the latest quarter compared with 2,896,000 in the previous quarter, a change the statistics agency described as not significant in level terms. The participation rate declined to 70.4% from 70.6%, below the 70.7% forecast, indicating that unemployment rose even as fewer people were looking for work.

Beneath the stable headline level of employment, there were notable shifts in how people were employed. The number of people in part-time work increased, while full-time employment decreased. Within these changes, 11,000 more men and 3,000 more women were employed part-time, while full-time employment fell by 16,000 for men and 2,000 for women, pointing to a move away from full-time positions.

Conditions appeared particularly challenging for younger people. The share of 15 to 24 year‑olds who were not in employment, education or training rose to 14.1% in the September quarter, up from 13.8% in the previous update, indicating an increase in youth disengagement from both work and study.

Unemployment outcomes varied across regions. Northland recorded the highest regional unemployment rate at 8.3%. Auckland, Waikato and Manawatu‑Whanganui each had unemployment rates of 6.3%, while Gisborne / Hawke's Bay stood at 5.4%.

Lower rates were recorded in some other areas. Bay of Plenty had an unemployment rate of 4.4%, Taranaki 4.8%, and Wellington 4.9%. Tasman / Nelson / West Coast recorded the lowest listed regional rate at 4.1%, highlighting differing labour market conditions across the country.

Wage growth continued to trail consumer price inflation.

The data followed a decision on 28 October by the Reserve Bank of New Zealand to hold the official cash rate at 2.75% in a 4:3 vote. The majority on the committee cited weaker than expected inflation, stable inflation expectations and subdued wage growth, and argued that earlier rate increases required time to take effect. The subsequent labour market figures, showing rising unemployment, soft employment growth and easing wage pressures, are consistent with those concerns about underlying economic momentum.