Unemployment just hit 5.6%, the highest it’s been since 2015.
Every headline this week has some version of “11-year high” in it, and the collective mood among business leaders currently sits somewhere between “brace for impact” and “sell the office plants.”
Everyone take a deep breathe, it hasn’t fallen off a cliff. It’s more stuck in traffic than in freefall, and I think that distinction matters, especially if you’re the one making hiring decisions right now.
Here’s what actually happened, courtesy of Stats NZ’s June 2026 quarter release:
The unemployment rate rose to 5.6%, up from 5.4% in March. That’s 166,500 people unemployed, 19% of them for more than a year, and about 8,000 more long-term unemployed than the same time last year.
Then there’s underutilisation, which sounds like something a management consultant invented to bill you more, but really just means “everyone who’s unemployed, plus everyone stuck in fewer hours than they want, plus everyone hovering at the edges wondering if it’s worth applying.” That number jumped to 13.8%, up from 12.9%, covering 440,000 people.
Grim reading, no argument there, I’m not saying 166,500 people out of work is actually great news wearing a disguise…. it isn’t.
But what gets buried by paragraph six, right after the stock photo of someone staring meaningfully out a window: employment didn’t fall. The employment rate held steady at 66.7%, and the actual number of people in jobs rose by 13,000 to just under 2.91 million. Wages kept climbing too, average ordinary-time hourly earnings hit $44.62, up from $43.39 a year earlier.
So we’ve got more people employed, wages still rising, and unemployment climbing at the same time. Try explaining that at a barbecue without someone squinting at you like you’ve just claimed the sausages are a vegetable. It’s not a market where businesses are shedding staff in a panic.
It’s a market where the labour supply is growing faster than the number of new roles being created, more people turning up to the party, same number of seats.
That’s a “stuck” market, not a “sinking” one. And the difference changes what you should actually be doing about it.
Why the framing matters for recruiters and hiring managers
If you buy the “sinking” story, the instinct is defensive: freeze hiring, wait it out, assume anyone still available must have three heads. That instinct is exactly what’s driving a lot of the caution employers reported this quarter, the Employers and Manufacturers Association pointed to businesses “focused on retaining the staff they already have rather than taking on new employees,” with global uncertainty and rising costs doing a lot of the talking, and oil prices getting blamed for roughly everything short of the weather.
Fair enough, in the short term. Nobody’s out here telling you to go on a hiring bender because the vibes are technically only medium-bad. But if the real story is a “stuck” market, where good people are staying in the pool longer because there simply aren’t enough seats, not because something’s wrong with them, the smart move isn’t retreat. It’s speed and clarity when you do have a role open. The “we’ll get to it eventually, probably, maybe Q3” approach is exactly how you lose the good ones to someone who actually replied to their email.
The long-term unemployment number is the one I keep coming back to. Nearly one in five of the unemployed have been out of work for over a year, and that cohort grew again this quarter. In a genuinely “sinking” market, that’s a sign of structural decline. In a “stuck” one, it’s often a sign of mismatched expectations, slow processes, or roles sitting open for months while everyone waits for a unicorn candidate who was, statistically, never coming, five years’ experience, entry-level salary, fluent in three programming languages and vibes.
The market isn’t sinking. It’s stuck. And stuck markets don’t reward whoever shouts the loudest about oil prices, they reward whoever actually moves.
What’s your read, is this caution, or an opportunity hiding in plain sight?
Sarah 🧡
First published in Sarah’s LinkedIn newsletter, Recruitment Rambles. Read the original edition on LinkedIn.
