What the latest jobs data is (and isn't) telling us
A disappointing curtain-raiser jobs report
New figures from Stats NZ show New Zealand had 27,850 fewer filled jobs in June 2025 than a year earlier, with construction accounting for nearly half that drop. Yet on a monthly basis, jobs rose slightly – a 0.1% increase – though economists warn the figures, drawn from IRD payroll data, are often revised down. Known as the Monthly Employment Indicators (MEI), this dataset gives a useful early signal about labour market trends but is less comprehensive than the official unemployment rate, due out next week. That figure currently sits at 5.1%, up from 4.0% at the start of 2024.
Despite the technicalities, the trend is clear: job growth is stalling, especially outside the booming primary sector. David Hargreaves at Interest.co.nz says the Reserve Bank's already-muted optimism for employment growth may have been misplaced. 'The RBNZ has forecast the unemployment number will rise to 5.2%. It's looking possible we may in fact see 5.3%.'
Underemployment hides in plain sight
If the stats are merely average, why does the job market feel so bleak? Writing in the Herald (Premium paywalled), Liam Dann points to types of jobseekers who often aren't captured in the figures: New Zealanders opting out of the labour force altogether by leaving for Australia, people giving up and returning to study, and those who are underemployed.
While part-time roles are growing, that's often not by choice. As RNZ's Evie Richardson reports, an increasing number of people are cobbling together multiple part-time jobs, not out of preference but necessity. As CTU economist Craig Renney puts it: 'These are people who might well want to work full-time, can't find full-time work but will happily take any job just to keep an income coming into their household.'
Writing on his own blog, Renney explains a phenomenon called wage scarring – 'where people take any job to pay the bills, but it traps them in lower paid work which affects their earnings for a significant period of time'. MBIE found that 'New Zealand workers tend to bear more significant income and employment 'scars' than workers in other OECD countries'. Writes Renney: 'The high-level data suggests that we are likely setting up another round of wage scarring right now.'
Young, eager and locked out
No group is feeling the downturn more than young people. Nationwide, 16% of 15 to 24-year-olds are now unemployed, and there has been a 41% increase in Jobseeker Support claims for 18-24 year olds over the past two years.
'If you're a young person out there who can't find a job: it's not you, it's them,' Infometrics economist Brad Olsen tells The Press's Elsie Williams (paywalled). He says the problem is structural: fewer roles, more competition, and employers demanding experience young workers don't yet have. Olsen says it's not just about short-term fixes – the government must help young people gain the skills that industries actually need. Without that, a generation risks being left behind.
Fixing a system that fails both sides
Writing in The Spinoff this morning, Max Rashbrooke argues it's not just the job market that's broken – the welfare-to-work system is too. Drawing from a new report for the Institute for Democratic and Economic Analysis (Idea), a thinktank he co-founded, Rashbrooke outlines how Work and Income fails to serve either jobseekers or employers. Because beneficiaries aren't screened for job suitability, businesses waste time interviewing unfit candidates while jobseekers end up in roles wildly misaligned with their skills.
As Rashbrooke notes, up to half of the workforce may be in roles that don't match their capabilities, a drag on productivity and morale alike. His solutions include tailored job plans based on a deep understanding of each jobseeker's background and a major uplift in investment in vocational education and mid-career retraining. In a market where work is harder to find, he says, the system should be doing far more to help people make the most of their potential – not less.
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