The New Zealand government expects the unemployment rate to continue falling following the latest quarterly improvement.
The rate fell to 6.2 per cent in the three months ended September 30, down from 6.4 per cent in the June quarter.
Statistics New Zealand's Household Labour Force Survey showed employment grew 1.2 per cent, led by gains in retail, accommodation and food services, and the construction sector.
Workforce participation rose to 68.6 per cent from 68.1 per cent.
Employment Minister Steven Joyce says the economy is strengthening.
"While unemployment is still higher than we would like, it has declined from 7.2 per cent a year ago," he said.
"The overall trend is of an improving labour market as the economy picks up, momentum is continuing to grow and the recovery from last summer's drought is under way."
Labour says that without the Christchurch rebuild, unemployment would be 6.5 per cent.
"When it comes to jobs, Christchurch is the only driver keeping New Zealand's head above water," Labour's employment spokesman Grant Robertson said.
"National is busy telling New Zealanders the economy is on the up and there are jobs for those who want them - but 150,000 Kiwis are still struggling to find jobs to feed their families and pay their rents and mortgages."
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