New Zealand unemployment rises to 5.1% in December quarter

'This was the largest annual fall in employment since the year to the December 2009 quarter'

BY Dexter Tilo 07 Feb 2025

New Zealand’s unemployment rate rose to 5.1% in the December 2024 quarter, marking the highest level since September 2020, according to data released by Stats NZ.

The figures show continued growth in unemployment, with 33,000 more people out of work compared to the previous year, bringing the total number of unemployed to 156,000.

In addition to the rise in unemployment, other key labour market indicators for the December 2024 quarter include:

Employment rate: 67.4%
Annual wage inflation: 3.3%
Average ordinary time hourly earnings: $42.57

Labour market spokesperson Deb Brunning noted the ongoing trend: "Unemployment has been increasing since late 2022. The unemployment rate in the December 2024 quarter was the highest it’s been since the September 2020 quarter, when it was 5.2 percent."

Underutilisation and employment declines

The underutilisation rate, a broader measure of unused labour capacity—including the underemployed and those available for work but not actively seeking it—rose to 12.1%, up from 11.6% in the September 2024 quarter and 10.7% a year earlier.

Meanwhile, the employment rate fell from 69.0% in December 2023 to 67.4%, reflecting a decline of 32,000 employed people over the past year, says Stats NZ.

"This was the largest annual fall in employment since the year to the December 2009 quarter," Brunning said.

New Zealand's unemployment rate will likely continue rising in 2025 and peak halfway through the year, according to reports.

Male-dominated sectors see sharpest declines

Men accounted for 85% of the employment decline, with significant job losses in technicians and trades, as well as machinery operators and drivers—industries that tend to have higher male representation.

There was also a shift from full-time to part-time work for men.

36,000 fewer men were employed full-time compared to a year earlier.
9,000 more men moved into part-time work.

For women, the number of full-time jobs declined by 5,000, while part-time employment remained largely unchanged, says Stats NZ.

Employment confidence in New Zealand rebounded in the December quarter as perceptions over job availability improved, according to the latest data from Westpac McDermott Miller.

Wage growth slows in NZ

Annual wage growth remained positive but continued to slow.

All salary and wage rates (including overtime) rose 3.3% in the year to December 2024, down from 3.8% in the September quarter.
Average ordinary time hourly earnings increased 4.2% to $42.57, slightly higher than the 3.9% annual growth recorded in September but significantly lower than the 6.9% rise seen in December 2023.