New Zealand’s unemployment rate has risen to 5.6 percent, with young people and Māori experiencing some of the sharpest increases in underutilisation.

Figures released by Stats NZ show the seasonally adjusted unemployment rate increased from 5.4 percent in the March quarter to 5.6 percent in the three months to June.

The broader underutilisation rate rose from 12.9 percent to 13.8 percent.

Underutilisation includes unemployed and underemployed people, as well as those who want work but are not actively seeking it.

“The unemployment rate was 5.6 percent in the June 2026 quarter, compared with 5.4 percent in the March 2026 quarter,” Stats NZ labour market spokesperson Abby Johnston said.

Labour described the figures as a damning verdict on Prime Minister Christopher Luxon’s economic management.

“Christopher Luxon promised he would grow the economy, create jobs and lower the cost of living,” Labour finance and economy spokesperson Barbara Edmonds said.

“Instead, unemployment continues to rise and Kiwis are paying the price.”

Edmonds said unemployment had reached its highest level in 11 years, with 171,000 New Zealanders now out of work.

She said that was 48,000 more unemployed people than when National took office.

“Behind every unemployment statistic is a person who wants to work, a family worried about paying the bills and a community feeling the impact,” Edmonds said.

“That’s the real cost of National’s economic choices.”

Edmonds said young people were being hit particularly hard, with too many unable to find the first job needed to begin their careers.

“Christopher Luxon can keep telling New Zealanders the economy is turning a corner, but if you’ve lost your job, can’t find work or are worried you’ll be next, you know that simply isn’t true.”

She said Māori and Pasifika communities continued to bear the greatest impact, with unemployment rates of 10.8 percent and 11.6 percent respectively.

“National can’t claim success when their choices have deliberately made things worse,” Edmonds said.

“They cut thousands of public sector jobs, cancelled major infrastructure projects and scrapped investment that supported business and innovation.”

National finance spokesperson Nicola Willis said the figures reinforced the importance of the Government’s plan to grow the economy and create jobs.

“It’s been a tough few months for employers grappling with real cost pressures and genuine uncertainty, and today’s unemployment figure of 5.6 percent reflects that,” Willis said.

“It reinforces why New Zealand can’t afford to let up on the policies that boost employer confidence and support people into work.”

Willis said National was working to keep taxes and government spending down to reduce pressure on inflation and interest rates.

She pointed to tourism, international education, infrastructure investment, faster approval of major construction projects and the Investment Boost tax incentive as policies intended to encourage growth.

“National has a clear long term plan to do exactly that,” Willis said.

“We are fixing the basics in the economy by keeping taxes low and government spending down to ease pressure on inflation and interest rates, which is more important than ever when there is so much global volatility.”

Willis accused Labour of opposing policies intended to support employment while proposing new taxes that she said would undermine business confidence.

“Labour and its coalition partners want to load businesses up with a suite of new taxes at precisely the moment employer confidence needs protecting, not undermining,” she said.

“Broad new taxes as proposed by Labour, the Greens, Te Pāti Māori and The Opportunity Party would choke off the recovery we’ve worked so hard to build.”

Willis also questioned Labour’s proposed Future Fund, saying deputy leader Carmel Sepuloni had admitted there was no modelling showing how many jobs it would create or when.

“That’s not a jobs plan. It’s barely even a slogan,” Willis said.

“National has a long term plan to grow the economy, create jobs and build New Zealand’s future. Labour has no idea whether theirs will even work.”

The number of underutilised people increased by 32,000 during the quarter, reaching 440,000.

That included an estimated 171,000 unemployed people, 154,000 underemployed people and 115,000 people in the potential labour force.

Despite the higher unemployment rate, the number of people in work increased by 0.5 percent during the quarter.

Young New Zealanders recorded the largest annual increase in underutilisation.

The underutilisation rate for people aged from 15 to 24 rose from 33.6 percent to 37 percent over the year.

The number of underutilised young people increased by 21,500, including an additional 12,200 who were unemployed.

Conditions also weakened for people aged from 25 to 34.

Their underutilisation rate rose from 9.7 percent to 11.6 percent, with an additional 11,900 people underutilised compared with a year earlier.

Underemployment was the largest contributor to the increase for that age group, rising by 6,600.

Māori accounted for more than a quarter of all underutilised people during the June quarter.

The Māori underutilisation rate reached 22.8 percent, an increase of 3.2 percentage points over the year.

Long term unemployment also increased.

Of the 166,500 people recorded as unemployed using figures that were not seasonally adjusted, 19 percent had been without work for more than a year.

“Around 8,000 more people were experiencing long term unemployment in the June 2026 quarter than in the same quarter in 2025,” Johnston said.

Annual wage inflation was 2 percent, as measured by the Labour Cost Index.

Average ordinary time hourly earnings reached $44.62.

“Labour is focused on real ways to grow our economy and get more Kiwis back into work,” Edmonds said.