Jobs Growth Lifts Confidence as Economy Shows Early Signs of Recovery

While the unemployment rate edged up 0.1 percentage points to 5.4 per cent, it came in slightly below the 5.5 per cent forecast by Treasury in the December Half Year Economic and Fiscal Update.

New Zealand’s labour market delivered encouraging signs at the end of last year, with more people in work and growing confidence that economic conditions are beginning to improve, Finance Minister Nicola Willis says.

New data released today by Stats NZ shows 15,000 additional people found employment in the final three months of 2025, alongside increases in total hours worked and the number of people actively seeking jobs.

“These are important indicators of an economy that is starting to turn a corner,” Nicola Willis said. “More people are working, more hours are being offered, and more New Zealanders believe there are opportunities worth pursuing.”

Employment Gains Offset Modest Rise in Unemployment

While the unemployment rate edged up 0.1 percentage points to 5.4 per cent, it came in slightly below the 5.5 per cent forecast by Treasury in the December Half Year Economic and Fiscal Update.

“Of course, we would like unemployment to be lower,” Willis said. “But the underlying detail matters. The increase partly reflects more people entering the labour force, which is a sign of confidence rather than weakness.”

Economists are widely forecasting that unemployment will begin to fall later this year as economic activity strengthens and demand for labour improves.

Youth Outcomes Show Encouraging Improvement

One of the most positive signals in the data is a decline in the proportion of young people not in education, employment or training (NEET). The rate fell from 13.7 per cent to 13.2 per cent over the quarter.

“That means more young New Zealanders are getting skills, gaining experience and setting themselves up for the future,” Willis said. “That is critical for long-term productivity and social outcomes.”

Confidence Builds Across Economy

The labour market data aligns with other recent indicators showing rising business and consumer confidence, suggesting households and firms are beginning to look ahead with greater optimism after a challenging period of high inflation and tight financial conditions.

“Many Kiwis are still doing it tough, and there is no room for complacency,” Willis said. “But the signs are increasingly clear that the Government’s focus on fixing the basics and building the future is starting to pay off.”

Foundation for Growth and Jobs

The Government says its economic strategy—focused on restoring fiscal discipline, reducing inflation pressures, and improving the environment for investment—is designed to support sustainable growth and job creation.

“These results suggest it is becoming easier for businesses to invest, innovate, grow and employ more people,” Willis said. “That is how we lift incomes, create opportunity and strengthen New Zealand’s economic future.”