New Zealand Unemployment Rises to 5.7%, Highest Since 2015
New Zealand’s unemployment rate rose to 5.7% in the September 2026 quarter, its highest since 2015, Statistics New Zealand said on November 4, 2026. The result was weaker than expected, with employment falling slightly instead of rising.
What happened
Statistics New Zealand reported that 174,000 people were unemployed in the September quarter, up 3,000 from the previous quarter. The unemployment rate rose to 5.7%, from 5.6% in the June quarter. Economists in a Reuters poll had forecast 5.5%, and the Reserve Bank of New Zealand had also forecast 5.5%.
Employment fell 0.1% from the prior quarter, while the Reuters poll had expected a 0.4% rise. The participation rate, which measures the share of working age people in work or looking for work, eased to 70.4%, from 70.6%.
Wage growth stayed soft. The labour cost index rose 2.1% over the year, well below annual consumer price inflation of 3.7% in the September quarter. That means average pay rises did not keep pace with rising prices over the year.
A wider measure of spare capacity in the jobs market, called underutilisation, held at 13.8%. That measure also counts people who want more hours and people who want work but are not actively looking for it.
Reuters reported the figures on November 4, 2026, and its account matches the Statistics New Zealand release summarised by other outlets the same day.
Why it matters for beginners
The unemployment rate is a simple way to see how hard or easy it is to find work. A rising rate usually means fewer job openings, slower hiring, or more people competing for each role.
Three points from this release matter most for beginners.
First, a weaker jobs report can change what people expect from interest rates. When jobs weaken, a central bank may feel less pressure to raise rates quickly, because higher rates can slow hiring further. Markets reduced bets on a December rate rise after this release, according to reporting on the figures.
Second, wage growth below inflation means everyday budgets feel tighter even for people in work. If pay rises 2.1% while prices rise 3.7%, the same pay buys less than a year earlier.
Third, this release comes shortly after a surprise decision by New Zealand’s central bank. On October 28, 2026, the Reserve Bank of New Zealand held its Official Cash Rate at 2.75% instead of raising it, as covered in our post on the New Zealand central bank surprise rate hold. A softer jobs report adds to the case for caution, though it does not by itself decide the next rate move.
What to watch next
The next Reserve Bank of New Zealand decision is due in December, alongside updated forecasts. Three things will matter before then.
One, fresh inflation data. If inflation rises toward the bank’s expected 4.4% in the December quarter, pressure for a rate rise could return. If inflation stays softer, the case for waiting gets stronger.
Two, the next jobs update. One quarter does not make a trend, so watch whether employment recovers or weakens further, and whether the unemployment rate keeps rising.
Three, the election context. The release arrived days before New Zealand’s November 7 election, so jobs and living costs are likely to stay central to the public debate, whatever the next central bank decision is.
Frequently asked questions
What is the unemployment rate?
It is the share of people in the labour force who do not have a job but are available for work and actively looking for it. In New Zealand it is measured by Statistics New Zealand through the Household Labour Force Survey.
Why was 5.7% a surprise?
Economists in a Reuters poll expected 5.5%, and the Reserve Bank of New Zealand had also forecast 5.5%. Employment was expected to rise 0.4%, but it fell 0.1% instead.
Does higher unemployment mean interest rates will fall?
Not automatically. A weaker jobs market can reduce pressure for a rate rise, but the central bank also watches inflation, which is still above its 1% to 3% target band. The next decision will weigh both sides together.
What is underutilisation?
It is a wider measure than unemployment. It also includes people working part time who want more hours and people who want a job but are not actively searching. It held at 13.8% in the September quarter.
