Statistics New Zealand figures released yesterday, showed that the country's unemployment rate rose to 6.8% in June, well up on the 6% recorded in March.
The rise unwound much of the drop in unemployment seen in March and indicated a period of volatility in the labour market, labour market statistics manager Peter Gardiner said.
Unemployment rose 19,000 during the June quarter to reach 159,000, marked by an increase in unemployed males. As with the fall in the March quarter's unemployment, the latest rise in June was largely unexpected and reflected movements among younger males.
"These movements indicate that the labour market is still adjusting to the changing economic climate," he said.
Labour leader Phil Goff said more New Zealanders had been made unemployed during the last three months because of Prime Minister John Key's lack of a plan to keep the economy moving.
"This is more evidence that the Government's economic policies are failing. It is clear John Key's smile and wave attitude is doing nothing to help Kiwis who face the daily reality of being unemployed.
"The rise in unemployment is well above what many economists predicted and paints the real picture of the struggle many Kiwi families are going through," he said.
In her defence, Minister of Social Development, Employment and Youth Affairs, Paula Bennett said the Government always knew it would be a bumpy road to recovery post-recession.
"It is, but an overall picture is emerging of a very slow, steady recovery."
The trend showed that, since December 2009, there were 5000 fewer people unemployed and an extra 15,000 people in work.
Many New Zealanders whose hours were reduced during the recession were seeing those hours increase again, which was part of the big picture, she said.
"But the fact is we still have too many people out of work and that's where our focus remains," Ms Bennett said.
ASB economist Jane Turner said the June figures, coupled with further falls in dairy prices, were enough to put the Reserve Bank official cash rate rises on hold later this year.
There had been a few rogue employment results in recent quarters. However, the trend in the labour market appeared weaker than many expected.
The Reserve Bank expected the unemployment rate to remain at 6% in June and trend down from there. The rate had rebounded and appeared unlikely to track as low as the central bank's forecasts, she said.
ASB still expected an OCR increase in September, but put a lower (60%) chance on that happening. In addition, ASB expected a 4.5% OCR peak next year, down from a 5% forecast.
Green Party co-leader Metiria Turei said the unemployment figures demonstrated how inappropriate the Government's planned "future focus" welfare reforms were.
"Everyone deserves decent work, a living wage and to be treated with respect. In a time of high unemployment, decent work and a living wage can be hard to come by."
At such a time, punitive reforms to work-test people on the sickness, invalid's and domestic purposes benefits, and cut their benefits if they did not comply, were completely inappropriate, she said.
Most people receiving a benefit did so to get through a challenging time and move back into work at an appropriate time, Ms Turei said.
