“Obviously, we would prefer the [unemployment] rate to be lower still but the underlying details are positive and economists are expecting the unemployment rate to fall this year as the economy recovers,” Willis said in a statement.  

Hiring to pick up in 2026  

Meanwhile, the Employers and Manufacturers Association (EMA) said the rise in unemployment was disappointing but not unexpected.  

“We had hoped it would bottom out at 5.3%, even though some projections have it going to 5.5% by later this year,” said Alan McDonald, head of advocacy at the EMA, in a statement.  

But McDonald also noted that the past months have seen confidence, forward orders, and activity firm up. The BNZ-BusinessNZ Performance of Manufacturing Index reached a three-year high of 56.1 in December, while the Performance of Services Index is at 51.5.  

These indices show signs of momentum that typically flow into hiring following a lag, according to the EMA. Â