Unemployment in New Zealand rose to an 11-year high in the second quarter of this year as global energy price shocks continued to weigh on the country's economy. Gold Price Analysis
According to Statistics New Zealand, the unemployment rate rose to 5.6%, compared with 5.4% in the previous quarter.
The figure is the highest since the third quarter of 2015 and exceeded most analysts' expectations.
The increase in the unemployment rate comes as companies face higher operating costs due to rising energy prices, thus affecting their profits.
At the same time, more people are entering the job market to find work, causing the labor force participation rate to rise.
Although the number of jobs increased by 0.5% compared to the previous quarter, the increase was not enough to accommodate the increase in job seekers.
New Zealand's economic recovery is also still fragile due to global geopolitical uncertainties, including the conflict between the United States and Iran, which has pushed up energy prices and weakened business confidence.
However, there were positive signs when the country managed to add about 33,000 new jobs in the 12 months to June, which is the best annual increase since 2023.
This shows that the labor market still has the potential to gradually recover.
ASB Bank economist Wesley Tanuvasa said the increase in labor demand and supply was a good sign despite the unemployment rate remaining high.
However, he explained that a surplus of labor still exists, causing pressure on wage increases to remain moderate.
After the report was released, the value of the New Zealand dollar fell slightly while government bond yields also fell.
At the same time, the annual wage growth rate increased for the first time in three years.
The Reserve Bank of New Zealand also raised the official interest rate to 2.5% to curb inflation that is still high and signaled that further increases may be needed.
Reserve Bank Governor Anna Breman stressed that her party is committed to returning the inflation rate to the target of 1% to 3%. She is also confident that the economy and the labor market can continue to recover in the medium term.
