The Reserve Bank says the economic recovery has “most likely resumed but remains uneven”. So the Reserve Bank thinks we’re starting to see a bit of a turn. But not everyone’s feeling it yet. 

Construction grew 2.7% in the June 2026 quarter, after some tough times before it.

But business confidence has jumped. A net 40% of firms expect the economy to improve. 

It's not a boom. But there's a big difference between an economy that feels gloomy and one that's still going backwards.

#2 – “There are no jobs out there”

Unemployment is 5.6%. That's 171,000 people looking for work. 

So I'm not going to sit here and tell you the job market is great for job-seekers.

However, while unemployment is up, so is employment.

The number of people in jobs is up 1.2% over the last year.

So how does that happen? How can employment and unemployment both go up?

Because there was a 1.2% increase in the number of people in work. But there was a 1.6% increase in the size of the workforce. 

For instance, stay-at-home parents aren’t counted as unemployed. They’re not looking for a job.

But if they, or retirees, or students start looking for jobs, they’re now in the workforce. So they’re now counted as unemployed. 

So a higher unemployment rate isn’t always the same thing as ‘fewer people in work’.

The Reserve Bank expects that balance to improve slowly. It forecasts unemployment to fall to 5.1% at the end of 2027.

#3 – “Inflation's back and interest rates are up.”

Inflation is back at 4.1%. So the Reserve Bank has lifted the OCR (the Official Cash Rate) twice, currently at 2.75%. 

After what happened a few years ago, this one's easy to panic about.

But a big part of this inflation spike is fuel, because of the conflict in the Middle East. The Reserve Bank says fuel added 1.2 percentage points to the 4.1%.

Look at inflation without vehicle fuel, and you get a very different picture. That measure actually fell from 3.2% in March to 2.9% in June.

So yes, filling up your car hurts right now.

But the data doesn't currently say we're heading back to the 7.3% inflation of 2022.

#4 – “House prices are flat. Maybe this is the new normal”

After the worst housing downturn in 60 years, house prices have been largely flat.

That’s when your brain thinks: “Maybe this is the new normal.”

But the Reserve Bank is forecasting a recovery starting mid- 2027.

That doesn't mean the Reserve Bank will be right.

But the things holding house prices back today: 

• lots of homes for sale
• more expensive mortgages, and 
• pay isn't keeping up with the cost of living.

These aren't necessarily the things we'll be talking about in 12 or 24 months.

(If anything, we’ll probably have a new set of problems.)

Don't mistake today for tomorrow

Don't get me wrong. I'm not saying everything is rosy.

There are genuine reasons New Zealanders feel worse off right now. 

But while you don’t want to think everything is all ok, you also don’t want to make the mistake of thinking that it’s “game over”. 

Two things can be true:

1. The last few years have been rough.
2. And the economy can already be starting to recover.

After a few bad years, it's very easy to assume that whatever is happening today will keep happening forever.

So if you're making a 10, 20 or 30-year investment decision, be careful about making it based entirely on how the economy feels today.

Today and tomorrow are different days.