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Macro EconomyMedium•3 November 2026•
2 min read

New Zealand unemployment forecasts range from 5.4% to 5.6% ahead of third-quarter data

Key Facts

1New Zealand third-quarter unemployment forecasts ranged from 5.4% to 5.6%.
2Unemployment was 5.6% in the June quarter, its highest level since the September 2015 quarter.
3ANZ forecast unemployment at 5.6% and employment growth of 0.3%, while Westpac forecast unemployment at 5.5% and employment growth of 0.5%.
4The market-priced probability of a December rate hike was 77% on 29 October.

Markets are awaiting New Zealand’s third-quarter labour-market data, with unemployment forecasts ranging from 5.4% to 5.6%, according to an article published by InvestingLive ahead of the release. The estimates leave open the possibility that the rate will retreat from its elevated level in the previous quarter or remain close to it. The rate rose to 5.6% in the June quarter, its highest since the September 2015 quarter, according to an economic review by the New Zealand Parliament. Banks’ forecasts differed on its direction in the September quarter, although they agreed on expected employment growth. The report comes as markets track labour and wage data amid debate over the timing of any further monetary tightening. The reading is set to take on added significance after the central bank held interest rates at its previous decision amid a split among its members.

ANZ forecast unemployment would remain at 5.6% in the third quarter, with employment growth of 0.3% quarter on quarter, Newswire NZ reported. Westpac forecast employment growth of 0.5% and a fall in the unemployment rate to 5.5%. The bank’s chief economist, Michael Gordon, said employment would rise 0.5% and unemployment would fall to 5.5%. In a separate forecast, Westpac said unemployment could drop to 5.5% as job growth accelerated in recent months, while wage growth remained limited. The bank said labour-force participation would be a decisive factor in the unemployment-rate reading. The divergence between the two banks’ estimates means expected job growth alone does not determine whether the unemployment rate will fall.

Four members of the Reserve Bank of New Zealand had previously voted to hold interest rates, while three backed a 25-basis-point increase, according to the bank’s statement. After the decision, the bank said the chance of a rate hike in December was high, while market pricing on 29 October showed a 77% probability of an increase. The New Zealand dollar fell sharply after the decision, Reuters reported via MarketScreener. The bank’s governor said the timing of future increases was uncertain and would depend on the economic outlook and inflation developments. The forthcoming labour-market reading therefore puts jobs, unemployment and wages forecasts in the context of an ongoing debate over the monetary-policy path. The next move remains tied to the bank’s assessment of the economic outlook and inflation trajectory, according to the governor’s comments.