Joblessness in New Zealand has unexpectedly risen to a fresh 11-year high, hitting 5.7 per cent in the September quarter.
The surprise result, announced by Stats NZ on Wednesday, falls three days from the country’s November 7 election, creating an almighty headache for Chris Luxon’s coalition government.
Most predictions were for a modest fall from the previous rate of 5.6 per cent, already the worst level in a decade.
Labour finance spokesperson Barbara Edmonds, whose party is in a tight race to take power in the election, seized on the result as evidence Mr Luxon’s economic approach had “made everything worse”.
“His last chance to show his plan was working has come and gone, and Kiwis are paying the price,” Ms Edmonds said.
The result is especially important given Mr Luxon is campaigning on his economic bona fides, with cost of living the central issue of the campaign.
In raw figures, there were 174,000 unemployed people last quarter – more than any point since 1993.
“We know now there are more than 50,000 people unemployed in this country than when Christopher Luxon came to office,” Greens co-leader Chloe Swarbrick said, tying joblessness to high child poverty rates.
The market consensus forecast was 5.5 per cent, which was also the tip of New Zealand’s central bank, which held rates last week in a shock move.
Wage growth was also sluggish at 2.1 per cent in the year to September, well below headline inflation of 3.7 per cent.
ANZ chief economist Sharon Zollner called the result “disappointing all ’round”.
“The gradual improvement in the economy over the past year has driven a modest improvement in employment growth, but not yet enough to stem the four-year-long upward trend in the unemployment rate,” she said.
The upside to the poor numbers is that it is likely to help to contain inflation.
“Contained wage growth is not good news for households facing acute cost-of-living pressures. It does mean that wage-price spiral risks are mitigated,” Ms Zollner said.
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