Wellington, May 6 : New Zealand's unemployment rate eased to 5.3 per cent in the March 2026 quarter from 5.4 per cent in the December 2025 quarter, Stats NZ said on Wednesday.

The statistics department reported the number of unemployed falling to 163,000 in the March 2026 quarter from 165,000 in the December 2025 quarter, with the employment rate standing at 66.7 per cent, reports Xinhua news agency.

The underutilisation rate, a broader measure of untapped labour market capacity than unemployment, remained the same at 12.9 per cent, with 406,000 underutilised people in the March 2026 quarter, the department said.

It added that the measure includes unemployed and underemployed people, as well as those in the potential labour force.

Meanwhile, annual wage inflation was 2 per cent in the March 2026 quarter, compared with a 3.1 per cent rise in the consumer price index, while average ordinary-time hourly earnings reached 44.12 NZ dollars (26.11 U.S. dollars), Stats NZ said.

The proportion of young people aged 15 to 24 not in employment, education, or training (NEET) rose to 14.4 per cent in the March 2026 quarter from 13.3 per cent in the December quarter, it said, highlighting the growing difficulty for young people entering the labour market.

Young women continued to face higher disengagement rates than men, with the NEET rate for women aged 20 to 24 rising 1.9 percentage points to 20.3 per cent in the March 2026 quarter, Stats NZ labour market spokesperson Abby Johnston was quoted as saying.

Economists warned that the Middle East conflict and rising fuel costs could dampen business sentiment, likely leading firms to pause hiring in the coming months.

/IANS