New Zealand's Unemployment Rate Up Sharply in 2Q
By James Glynn
SYDNEY--New Zealand's unemployment rate rose sharply in the second quarter, highlighting the ongoing fragility of the economy amid ongoing shocks from the war in the Middle East.
The unemployment rose to 5.6% in the second quarter from 5.4% in the first quarter, StatsNZ said Wednesday. Economists had expected a rise in the jobless rate to 5.5%.
The seasonally adjusted underutilization rate was 13.8% in the quarter, up from 12.9% in the prior quarter, it added. There were 440,000 underutilized people in the second quarter, up from 408,000 in the first quarter, the data showed.
The weakness in the job market comes even as inflation continues to rise, putting pressure on the Reserve Bank of New Zealand to raise interest rates further in coming months.
Annual inflation jumped to 4.1% in the second quarter, well up from 3.1% in the first quarter. That's more than twice the 2% midpoint of the RBNZ's target band.
Still, the pickup in price pressures across the economy in the second quarter wasn't particularly broad-based, with measures of core inflation still well behaved.
Some economists are arguing that the RBNZ should look through the inflation rise to support recovery in the economy and lower unemployment.
The RBNZ began raising interest rates earlier in July, increasing the official cash rate from 2.25% to 2.50%. The move was followed by a speech from Paul Conway, the bank's chief economist, who warned that firms appear eager to pass on rising costs quickly.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
August 04, 2026 19:34 ET (23:34 GMT)
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