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New Zealand's Q2 Employment Data Shows Spare Capacity Persisting in Labor Market, ANZ Says

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New Zealand's June quarter employment data showed a soft labor market with considerable spare capacity and a pause in the tentative improvement building before oil prices surged in February, ANZ Research said in a note on Wednesday.

The unemployment rate in the country rose 5.6% in the June quarter, up 0.2 percentage points from the March quarter and up 0.4 percentage points from the June quarter of 2025. The seasonally adjusted employment rate was 66.7% in the June quarter, unchanged from the previous quarter.

Labor supply was stronger than expected because of a stronger participation rate, while indicators of labor demand were mixed.

Employment grew more than expected, but hours worked and hours paid both fell, consistent with the bank's gross domestic product forecast of negative 0.2% quarter-over-quarter. The figures showed an

increase in the number of people underemployed and available potential jobseekers.

The data is consistent with the ANZ and the central bank's assessment that the labor market isn't a source of consumer price index inflation pressures, per the report.

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