On Wednesday, Stats NZ confirmed a widely-expected uptick in the jobless rate to 4.3 per cent as the post-COVID slowdown begins to bite.
Unemployment was four per cent in the last quarter, and 3.4 per cent a year ago.
It is the fourth quarter in a row that the jobless rate has risen, taking the rate to its highest level in three years.
Underutilisation - which includes unemployed Kiwis, part-timers wanting more work and unavailable jobseekers - is also up to 11.2 per cent from 10.7 per cent last quarter.
New Zealand is currently enduring a recession, with negative GDP growth in four of the last five quarters.
Finance Minister Nicola Willis, who will deliver the coalition government's first budget at month's end, said further increases were coming.
"I have to be careful not to get ahead of forecasts which may not have been released publicly," she said.
"We have seen forecasts that unemployment could reach as high as five per cent and obviously, that's of concern."
Ms Willis may be underselling the problem.
In its latest forecast in December, which will be refreshed at the May 30 Budget, Treasury believes unemployment could peak at 5.2 per cent early next year, while the Reserve Bank has tipped 5.1 per cent in mid-2025.
Latest release: Unemployment rate at 4.3 percent.— Stats NZ (@Stats_NZ) https://t.co/30bt3RoSBP pic.twitter.com/jRnVvK5dqAApril 30, 2024
ASB Bank senior economist Mark Smith believes things could get even worse.
"Our expectation is that the NZ unemployment rate will continue to head higher, moving above five per cent by the end of 2024, and peaking at about 5.5 per cent by mid-2025," he said.
Kiwibank chief economist Jarrod Kerr also thinks the unemployment figure will have a five on it before Christmas.
"There's only one way to characterise the labour market report, and that's weak," he said.
"The participation rate fell to 71.5 per cent - the lowest since June 2022 - as workers headed (or were forced) to the exits.
"We saw a big lift in older people remaining in work, and teenagers being attracted into the labour force post-Covid. No more."
Mr Kerr said given the labour market lagged the economy by up to 12 months, there was "still another year of softness ahead".
In real terms, there are 31,000 more Kiwis seeking jobs than this time last year, and 75,000 underutilised.
A majority of the increase in unemployed - 21,000 - are New Zealanders aged under 25.
While the jobless rate has not fallen since 2021, Stats NZ spokeswoman Deb Brunning said it remained historically low.
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