New Zealand’s unemployment rate climbed to 5.2% in the June 2025 quarter, up from 5.1% in the previous quarter, as the labor market continues to show signs of gradual cooling amid broader economic headwinds.
The latest data from Statistics New Zealand showed a 0.1% quarter-on-quarter decline in hiring as expected, while the previous reading was downgraded to show a flat figure from the earlier 0.1% uptick.
Key Points from the June 2025 Quarter Report
- Unemployment rises modestly: The seasonally adjusted unemployment rate increased to 5.2% from 5.1%, with the number of unemployed people reaching 158,000
- Employment rate declines: The employment rate fell to 66.8% from 67.1%, with total employed persons at 2.88 million compared to 2.91 million a year earlier
- Regional job losses concentrated: Auckland saw the largest employment decline with 23,100 fewer jobs, followed by Waikato (-11,100) and Taranaki (-5,200)
- Wage growth moderates: All salary and wage rates increased 2.4% annually, while average ordinary time hourly earnings rose 4.5% to $43.39
- Underutilization broadens: The underutilization rate climbed to 12.8%, affecting 403,000 people, with women disproportionately represented at 222,000
- Youth employment challenges persist: The NEET rate (not in employment, education, or training) for 15-24 year-olds remained stable at 12.9%
The modest uptick in unemployment came alongside a decline in the employment rate to 66.8%, down from 67.1% in March, signaling that fewer working-age New Zealanders are finding jobs in an increasingly challenging economic environment.
The underutilization rate, which captures a broader measure of labor market slack including underemployed workers, rose to 12.8% from 12.4% in the previous quarter. The 0.9% year-over-year drop in employment, with 26,000 fewer people in work compared to June 2024, underscores the challenging conditions facing job seekers across the country.
Link to official New Zealand Labour Market Statistics (June 2025 Quarter)
However, the wage price index presents a slightly more upbeat picture, with the Labour Cost Index showing all salary and wage rates rising 2.4% annually – a pace that remains above the Reserve Bank’s inflation target.
Market Reactions
New Zealand Dollar vs. Major Currencies: 5-min
Overlay of NZD vs. Major Currencies Chart by TradingView
The New Zealand dollar exhibited a mixed but generally positive reaction to the employment data release, with most major currency pairs showing modest gains.
NZD/USD pair approximately 0.43% a few hours after the release, suggesting markets may have been positioned for a weaker outcome or are focusing on the uptick in labor cost index from 0.4% to 0.6% quarter-on-quarter as an indicator of sticky wage pressures.
Against other major currencies, the kiwi dollar showed broad-based strength, gaining 0.41% versus the euro, 0.40% against the pound, and 0.36% versus the Swiss franc.
