New Zealand's annual unemployment rate rose to 6.4% in June but Statistics New Zealand figures showed employment also rose in the year by 0.4%.
Statistics NZ industry and labour statistics manager Diane Ramsay said the labour market was showing signs of improvement and employment was growing slowly.
Unemployment was down from a year ago, but up slightly since the start of the year. Wage inflation continued to be restrained.
Yesterday was the first day Statistics NZ had released the full suite of quarterly labour market statistics on the same day. It gave a more complete picture of the labour market, she said.
''This growth in employment lines up with the moderate economic recovery we've seen. Employment was falling during 2012 while growth in economic activity was slower.''
Economic growth continued to be led by Canterbury, Ms Ramsay said. More people were employed in Canterbury but the number of hours worked across the other regions also rose. The rise in hours outpaced the growth in employment in the rest of New Zealand.
Wage inflation, as measured by the Labour Cost Index, eased to 1.7% in the year to June, down from 2% at June last year. Wage rates for more than half of the positions surveyed in the index increased during the year.
Of those that rose, the average increase was the lowest since the December 2000 quarter at 3.4%, she said.
Annual consumer price inflation was at its lowest since 1999.
Growth in wages measured by the Quarterly Employment Survey continued to ease. Average ordinary time hourly earnings rose by 2.1% over the year, the lowest wage growth since the December 2010 quarter, Ms Ramsay said.
ANZ senior economist Mark Smith said the rise in the unemployment rate was not surprising, given it came on the heels of a large fall in March.
''An improving economic outlook is starting to translate into hiring, although employment growth remains stronger in the Canterbury region and in the construction sector. Neither are surprising.''
There were more positive signs more broadly, he said. Strong increases in paid hours for real estate and business services highlighted the possibility of a sizeable lift in second quarter services GDP (gross domestic product) and beyond.
The strengthening demand for labour was consistent with an improving economy, and a precursor to the official cash rate moving up, but a benign wage inflation backdrop and spare capacity was buying time, Mr Smith said.
''It remains a case of looking for the OCR to move up at some stage in the first half of 2014 but not getting overly excitable over the prospect or likely magnitude and speed.''
In Australia, the unemployment rate is expected to have hit a four-year high in July as the rate of hiring in the mining sector slowed.
The Australian Bureau of Statistics will release its monthly labour force figures this morning.
The median forecast from an AAP survey of 11 economists is for the unemployment rate to rise to 5.8%, from 5.7% in June. Australia has not had an unemployment rate of 5.8% since August 2009.
At a glance
- Unemployment rises to 6.4%
- Employment rises by 0.4%
- Average wage growth lowest since December 2000
- Ordinary time hourly earnings rose by 2.1%, the lowest wage growth since December 2010
