The Reserve Bank expects getting a job to gradually get easier, but some people could continue to find it much harder than others.
New Zealand’s unemployment rate hit 5.6% in the last quarter – its highest point in almost 11 years – as the growing number of extra jobs being created failed to keep up with the growing number of people looking for work.
Latest Reserve Bank projections suggest unemployment will very gradually fall, while the proportion of people working or looking for work will continue to gradually increase.
In March, Reserve Bank Governor Anna Breman told Newstalk ZB the labour market remained weak but there were “signs of the labour market strengthening”.
Six months on, Breman said New Zealand still did not have a “strong labour market” but there were “encouraging signs” and the central bank expected a “gradual decline” in the unemployment rate.
“We’ve actually seen employment growth being a bit stronger than we expected but we also see more people looking for work. That is why we have been seeing unemployment going up.”
Stats NZ data show the youth unemployment rate remained historically high last quarter: 25.3% for people in their late teens and 12% for people in their early 20s.
About 13% of young people were not in any education, employment or training, and those numbers were much higher in Bay of Plenty, Northland, Gisborne and Hawke’s Bay.
The overall unemployment rate also continued to track much higher in Auckland (6.5%) and Northland (8.8%) than it did in Canterbury (3.6%) and Otago (3.6%).
In 2024, Auckland Business Chamber chief executive Simon Bridges told Newstalk ZB the Government could be doing more to address Auckland’s weak economy and surging unemployment rate.
Two years later, the former National Party leader said unemployment remained a very real issue for Auckland and for young people.
Bridges said there was clear evidence that young people who were becoming “dislocated” from the job market were much more likely to remain out of work for a long period of time.
“There’s some good things happening, but you balance that up against SkyCity, Spark and others. Well over a thousand jobs in the CBD that have gone.”
There were signs of things picking up and some tech firms he was speaking to are doing exceptionally well, but it was still a “very slow, gradual, variable, shambling recovery” overall.
Breman said the Reserve Bank “cared deeply” about the situation and was closely monitoring it.
“This is still a really tough labour market for many households, particularly young households and also people who are being long-term unemployed.”
The central bank governor said getting prices down and getting people spending again was crucial to creating more jobs in the services sector, where about three-quarters of New Zealanders tend to work.
Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for over a decade.
