The unemployment rate has jumped to 5.7 percent, with 144,000 out of work.
Official figures show the number of people out of work rose to 144,000, or 5.7 percent in the first three months of the year, compared with a revised rate of 5.4 percent in the previous quarter.
"The total labour force increased by 38,000 people in the March 2106 quarter," labour market and households statistics senior manager Jason Attwell said.
"This resulted in more New Zealanders in unemployment and employment than three months ago."
Employment grew 1.2 percent in the quarter, outpacing the growth in the number of people entering the workforce.
Compared with a year ago, 47,000 more people were employed.
"Nearly half of the annual employment growth in New Zealand was in the Auckland region. By industry, construction and the professional services each employed 17,500 more people," Mr Attwell said.
But wage growth remained subdued.
Annual wage inflation edged up to 1.6 percent, with private sector wages up 1.8 percent, and the public sector up 1.4 percent.
Inflation stands at 0.4 percent.
Statistics New Zealand said 57 percent of wages rose in the year, though the annual mean increase of 2.9 percent was the lowest since June 1994.
Wage growth in the construction industry rose to 2.5 percent, the highest annual increase since the series began in 2010.
But it slowed in Canterbury, to 1.3 percent.