Unemployment in New Zealand continued to rise in September quarter
New Zealand's unemployment rate rose to 5.3% in the September 2025 quarter, hitting its highest level since 2016.
Stats NZ data revealed that there were 160,000 unemployed people in the September 2025 quarter, including 22,700 people who had been unemployed for over a year.
"The unemployment rate has been over five per cent for the last four quarters. The last time that the unemployment rate was 5.3% was in the December 2016 quarter," said labour market spokesperson Jason Attewell in a statement.
Meanwhile, the employment rate stood at 66.6%, annual wage inflation reached 2.1%, and the average ordinary time hourly earnings were $43.60.
Youth unemployment
Youth age groups were among the most impacted by labour market conditions, according to Stats NZ.
The unemployment rate for people aged 15 to 24 increased to 15.2% in the September 2025 quarter, higher than last year's 13.1%.
People in the same age range who are not in employment, education, or training (NEET) also rose to 13.8% in the September 2025 quarter, up 1.4 percentage points from the previous year.
"Women in their early twenties had some of the highest NEET rates, with 18.6% of women aged 20 to 24 not in employment, education, or training," Attewell said. "Of these, approximately one in three were engaged in caregiving."
The increase in unemployment comes as employers across New Zealand remain reluctant to hire workers.
Previous findings from Retail NZ revealed that retailers are holding off hiring despite the upcoming busy holiday rush amid a challenging environment.
'Widely predicted' increase
Both businesses and the government said they have been expecting the increase in unemployed people.
"It's no surprise the rate has edged up; it's been widely predicted," said Alan McDonald, Head of Advocacy at the Employers and Manufacturers Association, in a statement.
"While there has been a recent lift in business confidence, headlines like this tend to knock it back down. It's a reminder of how fragile the recovery still is."
McDonald said they are hopeful that unemployment has reached its peak, adding they have been observing signs of improvement.
"We're starting to see some hints of positive movement but it will take time before that's reflected in hiring intentions," he added.
Meanwhile, Finance Minister Nicola Willis said they are determined to help New Zealanders find work.
"That's why we're so focused on strengthening the foundations from which local businesses can grow and create new jobs," Willis said in a statement.
"We've successfully fixed the foundations. Taxes have been reduced. Inflation is back in band. Interest rates have fallen. Recovery is underway."
But she stressed that more can be done to speed up the country's economic recovery.
"We are working to ensure more Kiwi employers can be confident about starting, expanding, and creating new jobs. That's why we are driving our going for growth plan," the minister said.
