New Zealand has weathered the economic fallout of the Covid-19 storm better than the Government had anticipated, Prime Minister Jacinda Ardern says.

This comes after unemployment numbers this morning defied expectations, falling 0.2 percentage points to 4 per cent.

But, as ANZ senior economist Liz Kendall put it, "today's data massively understates the weakness that was prevailing in the labour market".

National's finance spokesman Paul Goldsmith had a similar perspective.

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"Today's unemployment figures don't tell the full story of the jobs crisis we're in as a country, and are masked by the 452,425 people on wage subsidies."

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He said when the second round of the wage subsidy expires on September 1, the "real cost of this economic downturn will be felt then".

But speaking to reporters before Question Time this afternoon, Ardern was more optimistic.

She said the Government had forecast spending $3.9 billion for the second round of the wage subsidy scheme – "it's been closer to $2 billion".

"That does give us an indication that we have weathered this storm better than we anticipated."

And the headline unemployment figure itself, Ardern said it shows that "things are certainly not as dire as had been predicted".

However, she warned it was important to look deeper into the numbers.

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National Party finance spokesman Paul Goldsmith says the unemployment figures don't tell the full story of the jobs crisis as they are
National Party finance spokesman Paul Goldsmith says the unemployment figures don't tell the full story of the jobs crisis as they are "masked by the 452,425 people on wage subsidies". Photo / Mark Mitchell

In its statement this morning, Stats NZ said roughly 650,000 people were away from their job, working fewer hours or less than they wanted, or were otherwise less active due to Covid-19 reasons related reasons, such as sickness or lockdown.

Finance Minister Grant Robertson said although it was good to see headline unemployment down, the number does not show the full impact of Covid-19.

"But it is a result that shows that we have come into this with a robust economy and New Zealand has got a good head start on the rest of the world."

He warned that it is the numbers from the September quarter that would help tell the full story of the economic impact of Covid-19.

But, for the most part, Ardern said the numbers were an illustration that the wage subsidy scheme had made a difference.

She did, however, warn against complacency.

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"It's still really important that we continue with our really strong plan for job creation and training."