Unemployment: Labour critical of Government, Finance Minister Nicola Willis sees green shoots

The latest unemployment rate is being called an “indictment” on the current Government by Labour, but the Finance Minister says it’s below what was predicted.

Stats NZ figures released today show the unemployment rate rose to 5.4% in the December 2025 quarter, up from 5.3% in the previous quarter. It now sits at its highest level since 2015, when it hit 5.7%.

However, that is lower than what the Treasury forecast for the December quarter in its Half Year Economic and Fiscal Update last year.

“The unemployment rate has increased as the economy has weakened, but a falling labour force participation rate has limited the rise in unemployment as many discouraged workers have exited the labour force,” Treasury said.

“The unemployment rate tends to lag real economic activity and is forecast to peak at 5.5% over the December 2025 and March 2026 quarters, before easing towards 4.3% by the end of the forecast period.”

Willis said on Wednesday that the Government would “prefer the rate to be lower still”.

“But the underlying details are positive and economists are expecting the unemployment rate to fall this year as the economy recovers.”

Finance Minister Nicola Willis said Labour should bring ideas to the table. Photo / Alyse Wright

The seasonally adjusted number of employed people has increased, with it now at 2,886,000, compared with 2,872,000 in the September 2025 quarter.

Willis suggested there are green shoots, including more people getting into jobs and the number of hours worked.

“Together with other recent surveys showing rising business and consumer confidence, these are signs of a growing economy in which people see increased opportunity.”

But Labour’s Chris Hipkins told media at Waitangi that the Government was making things worse.

“These are real people with families, bills to pay, and a Government that is in denial about the extent of the damage they’ve done to the New Zealand economy.”

Hipkins said the Government “needs to focus on job creation and get New Zealanders back to work”.

“The National Party is more interested in spin and excuses and blame than they are in actually making life better for New Zealanders.”

Willis responded to Hipkins by saying Labour should bring “a single idea to the table”. She also cited the Government’s fast-track regime as leading to more jobs.

Labour has a policy called the New Zealand Future Fund, which is a wealth fund intended to take the dividends of some Crown assets and redistribute them into New Zealand businesses in the hopes of creating new jobs.