Economic Service | Insights Hub

Economic updates

National Economic Outlook

Labour market statistics

More part-time workers wanting more

5 May 2021

Our take on the latest Labour market statistics (Wed 5 May 2021)

Unemployment rate falls to 4.7%

Underutilisation rate increases to 12.2%

Part-time workers up 3.6%, full-time down 0.2%

The key numbers...

The unemployment rate fell further to 4.7% in the March 2021 quarter (seasonally adjusted), driven by a 0.6% lift in employment. The peak unemployment rate since COVID-19 was 5.2% in the September quarter.
But the underutilisation rate rose to 12.2%, up from 11.9% last quarter, with an increase in the underemployment of women being a key factor, alongside the impact of Alert Level 3 in Auckland in February 2021.
On as a seasonally adjusted basis, part-time employment rose 3.6% in contrast to full-time employment which fell 0.2%. Part-time employment now represents 20.2% of employment.
The number of underutilised people is sitting 56,000 people higher than a year ago, with 31,000 of this addition being underemployed.
The number of people not in the labour force because they are studying or training is up by 20,000 people over the last year to 150,000 as people look to upskill or reskill before re-entering the labour force.

Unemployment drops but underutilisation up

% of labour force, seasonally adjusted

3927

...and our reaction

Rising employment and a lower unemployment rate reflects a more upbeat labour market.
The increase in underutilisation and underemployment shows there are a growing group of workers who are wanting to do more work, which underscores that there is still capacity in the labour market.
Actual hours worked fell 2.3% (seasonally adjusted) in March, reiterating the additional working capacity that is available.
The participation rate edged up slightly to 70.4%, which remains lower than pre-pandemic levels and suggests that although employment outcomes for some remain better, a large number of potential workers are still not active in the labour market.
We expect the labour market will continue to have spare capacity over 2021, although this capacity seems to be concentrated in underutilisation rather than in unemployment.

Latest updates

Labour market statistics

Unemployment jumps higher than expected

5.6% Unemployment rate in the June 2026 quarter (s.a.)

70.7% Participation rate the highest in over a year

0.5% Employment growth in June from March (s.a.)

Labour market statistics

More people, more working, more not participating

5.3% Unemployment rate eased slightly in the March 2026 quarter

70.4% Participation rate fell slightly

0.2% Employment rose in March from December (s.a.)

Labour market statistics

Higher participation drives unemployment increase

5.4% Unemployment rate December 2025 quarter (sa)

70.5% Participation rate December 2025 quarter (sa)

2.0%pa Labour Cost Index Year to December 2025

Labour market statistics

Unemployment rate rises to 5.3%

Unemployment rate edges up to 5.3%

Youth NEET rate rises to 13.2% (annual average)

Labour cost growth slows to 2.1%pa