New Zealand’s unemployment rate is expected to rise to 5.4% in Q2, matching RBNZ forecasts, but activity rebound may prompt a hike.
New Zealand’s employment growth likely slowed to 0.1% quarter-on-quarter in Q2, failing to keep pace with population gains. The unemployment rate is forecast to climb to 5.4%, aligning with the Reserve Bank of New Zealand’s May projections.
The expected rise in unemployment matches consensus estimates and returns to the cycle high seen in Q4 2025. Despite the labor market softening, economic activity appears to have rebounded in Q3, supporting expectations for a 25bps rate hike in September.
Analysts note the data reinforces the RBNZ’s cautious stance, though the central bank may still tighten policy further to curb inflationary pressures.