According to figures released yesterday, 115,000 people are now unemployed.
Despite the worsening data, more New Zealanders are employed than when the recession began about 18 months ago.
Westpac chief economist Brendan O'Donovan said yesterday the labour market was "remarkably resilient", compared with the United States, where 700,000 jobs were being lost each month.
"Before the recession, in 2007 data, there were 2.17 million people in full-time or part-time employment and now, 18 months on there are 2.18 million in jobs," he said.
Economists are predicting "further substantial job losses" this year as the recession deepens.
Thirty thousand people have joined the unemployed ranks since March 2008.
The release yesterday of Statistics New Zealand's household labour force survey, for the quarter to March, caps a week of negative employment-related data.
The New Zealand Institute of Economic Research this week forecast 50,000 more New Zealanders would be unemployed within a year, while Westpac yesterday predicted 80,000 job losses this year.
ASB economist Jane Turner said employment data had started to reflect the economy's weakness.
However, the 5% figure could have been larger, "given the extent to which other labour indicators have been softening".
The figure was in line with expectations with a poll of 13 economists by news service Dow Jones forecasting a median increase to 5.3% earlier in the week.
"However, the trend for the rest of 2009 is for further substantial job losses and continued increase in the unemployment rate," Ms Turner said.
ASB chief economist Nick Tuffley said reaching the 5% threshold "had to be kept in context".
Throughout the "boom period" of the 1990s, unemployment post-1987 crash started the decade at 11.2% and did not go below 6.2%.
For the quarter to December 2007, unemployment reached 3.5%, the lowest level since SNZ started the household survey in 1986, but had steadily risen since then.
ANZ chief economist Cameron Bagrie said it was likely the unemployment rate would continue to rise as the year progressed.
"With the economy being in recession since the start of 2008, it is somewhat surprising that a larger rise in unemployment and weaker employment growth have not been recorded, given recent overseas experience," he said.
Council of Trade Unions secretary Peter Conway said the recent spate of redundancies and forecasts pointed to unemployment going higher over the next year.
While the 5% figure was less than expected, youth unemployment was 19.6%, for those aged 20-24 years 12%, and Maori and Pacific Island unemployment respectively 11.9% and 13.1%.
He called for direct investment in job-rich projects across infrastructure, home insulation and environmental work; more support from Government procurement for the domestic economy, and greater assistance, including training opportunities, for workers laid off.
Mr O'Donovan said with most of the job losses in the youth sector, they might stay at school or university.
He said most job losses had been in Auckland, which was down 35,000 positions during the past 14 months.
