The Government is questioning the extent of youth unemployment by claiming that many defined as unemployed may be at school or university.

The youth unemployment rate - for those aged 15 to 24 - is 17.4 per cent for the June quarter, according to the Household Labour Force Survey.

For those aged 15 to 19, the rate balloons to 27.6 per cent.

Yesterday Prime Minister John Key downplayed this figure during question time, saying 60 per cent of the people being counted were at school or university.

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It was not clear if he was quoting an official figure.

This week Mr Key suggested the survey's definition of "unemployed" was different to how people normally interpreted the term.

"They may well be at university. They may be at school. That does not mean they are unemployed."

The survey defines "unemployed" as without work, seeking work such as through an employment agency, and available to work in the last week or in the next four weeks.

It uses a measure of one usual working hour per week to determine if people are employed; if they work less than that, they are not considered employed.

While the youth unemployment rate and the numbers of young beneficiaries are historically high, they are trending down.

The number of unemployment beneficiaries aged 18 to 24 peaked at 23,545 in January last year. It dropped to 16,530 last month.

The youth unemployment rate fell from 18.2 per cent last June to 17.4 per cent in June this year.

Much of that was due to a surge in employed people aged 20 to 24 but this was offset by a fall in the number of people aged 15 to 19 who were employed.

The Government has used the trend for the younger age group as justification for its policy for disengaged school leavers, which it announced at the weekend.

The Labour Party has broken the figures down further to claim that there are no jobs.

"When National came in, there were roughly 220 under 24-year-olds who had been on an unemployment benefit for more than a year. That number is now eight times higher," said Labour employment spokeswoman Jacinda Ardern.

Many consider the rate of those not in employment, education or training to be a better indication of disengaged youth. This rate also fell from 10.7 per cent last June to 9.8 per cent in June this year.

"The fall in [that rate] appears to be due to a modest increase in employment for people aged 20 to 24," a Department of Labour report said.

Many young people were deciding to stay in education longer.