The unemployment rate has risen to 6.7% at the end of March, the highest in 15 months.
The Household Labour Force Survey released on Thursday shows 160,000 people were officially unemployed at the end of March, up 9000 from the start of the year.
The unemployment rate of 6.7% was 0.3 percentage points up on the previous three-month period.
Statistics New Zealand says unemployment among women hit a near 14-year high of 7.1%.
Part-time worker numbers rose for the third consecutive quarter and were at their highest since at least 1986. Full time employment fell by 3000.
While 9000 new jobs were created during the three months, the increase was not enough to keep up with the 18,000 extra people looking for work.
The labour force participation rate rose to 68.8%, its second-highest rate ever.
UBS senior economist Robin Clements says the rise in the unemployment rate was larger than the market expected and is due to the strong increase in labour force participation.
"That meant there were more people looking for jobs, there weren't enough jobs for everybody ... so the unemployment rate was higher."
The rate of those aged 15-24 not in employment, education, or training increased to 13.6% in the year to March, a rise of half a percentage point. The rate for people aged 20-24 had risen but was lower for people aged 15-19 years.
The New Zealand dollar slipped half a cent against its US counterpart after the data was released but later recovered slightly to trade at US 80.6 cents at about midday
The Household Labour Force Survey results are based on a representative sample of 15,000 households throughout New Zealand.