New Zealand's labour force has grown by 36,000 people during the past quarter to a record high and participation reached a record 69.7%.
However, the number of unemployed rose to 5.7%, or by 38,000, when an easing to 5.3% had been expected by analysts.
The bounce in the unemployed numbers has been attributed to an increasing number of people entering the labour market.
There was an increase of 36,000 to 2.37 million employed, and a 38,000 increase to 143,000 unemployed.
The Government highlighted that it had continued ''to crank out strong job growth'', while Labour countered that the data was evidence of a ''jobless recovery''.
Annually, the number of people employed rose 3.5% in the Household Labour Force Survey (HLFS), part of a raft of data released by Statistics New Zealand (SNZ) yesterday covering jobs, wages and employment.
SNZ's labour market and households statistics manager, Diane Ramsay, said employment did not keep up with the record number of people entering the labour force.
''Even though employment growth was also strong over the quarter, the unemployment rate increased,'' she said.
The key contributors to national employment growth were Auckland and Canterbury; albeit Canterbury's growth had eased, compared with previous quarters.
For the year, the largest job growth was Auckland, up 22,300 jobs, Waikato 17,400 jobs, Canterbury 15,800 jobs, and the Bay of Plenty up 15,600 jobs. The 25,700 increase in construction jobs nationally, represented 32% of overall employment growth for the year.
ASB senior economist Chris Tennent Brown said employment growth was a lot more robust than expected, lifting 1.2% during the fourth quarter, and 3.5% over the year. ''The lift in employment was broad-based across industries, but the construction sector was a key driver,'' he said.
Minister for Tertiary Education, Skills and Employment Steven Joyce said the data showed continuing strong employment growth, with 80,000 more jobs added to the New Zealand economy during the last year.
''The New Zealand economy is continuing to crank out strong job growth in this latest survey,'' Mr Joyce said.
The other striking element in this jobs report was the record high participation in the labour market of 69.7%.
''This participation rate increase means that unemployment rises slightly to 5.7%, despite the strong job growth,'' he said.
However, Labour leader Andrew Little said New Zealanders were finding it even harder to get good jobs which paid a decent wage, showing National could not make the economic recovery deliver for all.
''This is a jobless recovery. The economy is growing but unemployment is increasing,'' he said.
There were 38,000 more people unemployed than when National got into office, he said.
''That shows there is something seriously wrong with the way National is managing the economy,'' Mr Little said.
As announced last week, Mr Little said yesterday that during the next two years Labour would develop a programme putting the small business sector at the centre of a long-term economic plan to create jobs.
A Westpac economist said while employment had been increasing, wage inflation had been soft.
''The private sector labour cost index, all salary and wage rates, increased by 1.8% over the past year as expected. A very modest result in the context of an economy that's been growing at a solid pace for some time now,'' she said.
Council of Trade Unions (CTU) secretary Sam Huggard said the Labour Cost Index revealed wages were up ''marginally'' during the past year, at 1.7%.
''The New Zealand economy is growing but real wages have not grown nearly as fast as they should have,'' Mr Huggard said.
''Simply, workers are not getting a fair share,'' he said.
He claimed mixed messages from the Government on one hand modelling for wage increases of more than 3% for coming years, but then attempting to talk down public sector expectations. Workers had already ''waited too long for a decent rise''.
''Many workers have had low pay increases or no pay increases at all in the last few years,'' Mr Huggard said.
