⁍ New Zealand’s unemployment rate unexpectedly fell in the second quarter.

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⁍ But the data masked weakness in the labour market.

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⁍ Fewer people looked for work and the number of hours worked plunged amid tight coronavirus restrictions.

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– Pandemic H1N1 may be winding down in the US, but in New Zealand it’s still taking a toll. The country’s unemployment rate fell to 4.1% in the second quarter from 4.2% a year earlier, beating economists’ expectations of 5.8%, Reuters reports. But that’s because fewer people were looking for work—the underutilization rate rose from 10.4% to 12.0%, the largest quarterly rise since 2004. And the hours worked fell by more than 10%—another record. “Today’s data massively understate the weakness that was prevailing in the labor market in Q2, due to measurement issues,” says an economist. “However, we know there are still some tough times to come,” says the country’s finance minister. New Zealand’s jobless rate is far below the 7.4% in Australia and 11.1% in the US. The country’s early response to the pandemic has allowed the economy to return to pre-pandemic normalcy. But the government has warned of a second wave of infections, and fears jobs will be lost when the state wage subsidy scheme ends next month. “These numbers show that going hard and early to beat the virus works,” says the finance minister. “However, we know there are still some tough times to come.”