New Zealand's Unemployment Rate Rises to 5.2% in Q2

New Zealand's jobless rate rose to 5.2% in Q2, up from 5.1% in Q1, while the participation rate slipped to 70.5%. The country's job market is in focus as the central bank considers an OCR cut. New Zealand's total new lending decreased in June, and home sales in Auckland rose 9% in July.

Wellington, July 2, 2025 - New Zealand's jobless rate climbed to 5.2% in the second quarter, according to official data released on Wednesday. This marks a slight increase from the previous quarter's 5.1% rate, as employment fell by 0.1% [1].

The unemployment rate, which measures the proportion of the labor force that is unemployed, was slightly higher than the 5.2% forecast by economists polled by Reuters. The central bank had also predicted the unemployment rate to be 5.2% [1].

The labor force participation rate, a measure of the percentage of the working-age population that is either employed or actively seeking employment, slipped to 70.5% from 70.7% in the previous quarter. This indicates a slight contraction in workforce engagement [2].

The underutilisation rate, a broader measure of spare labor capacity, climbed to 12.8% from 12.4% in March, suggesting growing slack in the labor market [2].

The Reserve Bank of New Zealand (RBNZ) is expected to consider a cut to the official cash rate (OCR) in August, with market probabilities favoring an 85% chance of a 25 basis points (bp) cut [3]. The decision comes amidst a backdrop of mixed domestic data, with business and consumer confidence softening and labor market indicators signaling cooling conditions.

New Zealand's total new lending decreased in June, while home sales in Auckland rose by 9% in July [3]. These developments highlight the evolving dynamics of the New Zealand economy, with the job market remaining a key focus area for policymakers.

References:
[1] https://www.investing.com/news/economic-indicators/new-zealands-q2-jobless-rate-rises-to-52-4171702
[2] https://tradingeconomics.com/new-zealand/unemployment-rate
[3] https://www.mpamag.com/nz/news/general/westpac-key-labour-market-reports-loom-as-ocr-cut-nears/545093