Finance Minister Nicola Willis Reacts to Lower Than Forecast Unemployment Rates

The latest labour market data showing lower than forecast unemployment has been noted by Finance Minister Nicola Willis.

Stats NZ data released today shows the unemployment rate for the June quarter was 5.2 per cent, below the Treasury forecast of 5.4 per cent.

Rising unemployment is tough on every New Zealander impacted and is the unfortunate after-effect of a historic period of out-of-control inflation, rapidly rising interest rates and stagnant growth.

Our Government has worked hard to restore responsible economic management but Treasury, in its pre-election fiscal update, made clear that unemployment would peak in the middle of this year. It’s of note, however, that today’s data confirms 8000 fewer unemployed people than Treasury forecast would be the case in its pre-election update.

Our Government remains focused on rebuilding the economy to deliver more and better paying jobs. A recovery is now underway with inflation back under control, interest rates falling and healthy rates of growth in the first three months of the year.

Despite global volatility and factors outside our control, we remain confident in New Zealand’s economic prospects and are working hard to create the conditions for future job creation with $6 billion of government-funded construction work kicking off before Christmas, fast-track projects beginning, exports growing and the Investment Boost tax policy giving businesses a reason to invest and grow.

We also note that average hourly earnings rose 4.5 per cent in the past year driven by wages in the private sector. This is well ahead of inflation at 2.7 per cent.