The Household Labour Force Survey showed that 38,000 more people were employed during the three months ended March, taking the annual unemployment rate down to 6.2% from 6.9% in December.
''The result follows news the economy grew 3% in the year to December and is another sign the economy is continuing to head in the right direction.
''While the fall in unemployment is a good result, it may be a little too good as this survey is known to move around and we need to be cautious,'' Mr Joyce said.
Labour employment spokesman Grant Robertson said the Government could not continue to rely solely on Canterbury rebuilding work to fuel job growth.
The Statistics New Zealand data showed unemployment had fallen to 4.3% in Canterbury, driven by rebuilding work.
However, excluding Canterbury, New Zealand's unemployment rate was 6.9%, or an estimated 6.6% on a seasonally adjusted basis.
''The truth is that the Government has no idea how to stimulate the economy and job growth. It is relying on the country's worst natural disaster to drive job growth. That's not sustainable and it's not a credible economic plan in anyone's book,'' he said.
Statistics NZ industry and labour manager Diane Ramsay said labour market conditions improved over the quarter as employment increased and unemployment fell. The employment rate rose to 63.7% in the March quarter, up from 62.7% in December.
The improvement followed a period of weakness in 2012.
''While this is a strong turnaround, the labour market has yet to recover to levels seen at the start of last year.''
The number of people unemployed fell by 15,000 over the quarter, she said. Usually, actual unemployment rose in March quarters as a result of seasonal factors such as students entering the job market.
''We didn't see this happen this quarter, and this has resulted in a larger-than-expected seasonally adjusted quarterly fall,'' Ms Ramsay said.
BusinessNZ chief executive Phil O'Reilly greeted the latest figures with ''cautious optimism'' as figures could bounce around between quarters.
The trend for youth employment was positive with a 2% increase in employment. But the overall number of young people not in employment, education or training was still far too high.
The data showed there was a 25.6% unemployment rate for people aged between 15 and 19 and a 10.9% unemployment rate for those aged between 20 and 24.
''With regard to youth employment, the need for a focus on young people gaining employable skills is paramount. It is critically important for our schools, families and education and training systems to make this our highest priority,'' he said.
ASB economist Daniel Smith said the first-quarter data provided some reassurance the labour market was not in the dire state shown in previous surveys.
Broad-based employment growth was encouraging but much of the strength could be a catch-up from previous weak quarters.
''As always, we will draw conclusions on the overall state of the labour market from a broad range of indicators,'' he said.
The Otago unemployment rate was 5.4% in the three months ended March but because the figures are not seasonally adjusted, they are nearly meaningless. Unemployment in Otago in December was 4.3% and in March last year it was 5.2%.
The region's working-age population in March was 180,000, down from 182,000 in December and 182,500 in March last year.
The labour force participation rate was 69.2%, up from 67% in December but down from 70.4% in March last year.
At a glance
• Unemployment rate 6.2%
• Employment rate 63.7%3
• 8,000 more people employed in March
• Number of unemployed fell 15,000 in March.
