Growth in the labour force has seen unemployment jump from 5.4 to 5.7 percent, new figures show.
The 1.5 percent growth in the number of people available for work -- 38,000 people -- is the biggest quarterly jump since 2004, says Statistics NZ.
Employment actually rose from 64.9 percent to 65.1, but the growth in the total labour force meant unemployment rose too.
"The lift in the participation rate was stronger than any forecasts," says ASB chief economist Nick Tuffley.
"This saw the unemployment rate rise to 5.7 percent. That lift was in line with our expectations, but slightly higher than the market or RBNZ forecast."
Compared to a year ago, 47,000 more people are in employment -- but that growth is concentrated in Auckland.
"Nearly half of the annual employment growth in New Zealand was in the Auckland region," says labour market and households statistics senior manager Jason Attewell.
Unemployment is down 0.1 percent on 12 months ago. The most-improved region was Bay of Plenty, with unemployment going from 7.8 percent to 5.1, one of the lowest rates in the country.
Wages on average are up 1.6 percent for the year, edging ahead of house price inflation around the country -- but well behind regions such as Auckland, which saw prices rise 14 percent in 2015.
Private sector wages led the way with 1.8 percent growth, while the public sector registered 1.4.
"Wage pressures are likely to remain subdued," says Mr Tuffley. "If the participation rate remains around this level then spare capacity in the labour market is likely to continue to weigh on wage growth."
Mr Tuffley says this will keep inflation low, perhaps making the prospect of interest rate increases unlikely.
Newshub.
