The government is blaming the Canterbury earthquakes for increased unemployment but opposition parties say it's a straight case of economic mismanagement.
Statistics released on Thursday show unemployment unexpectedly rose to 6.8 per cent in the June quarter.
That's an increase of just 0.1 of percentage point but economists had expected it to come down to 6.5 per cent.
Employment Minister Steven Joyce says the Canterbury labour market is continuing to affect the figures.
"Excluding Canterbury, employment rose by 15,000 in the quarter and unemployment fell," he said.
"This shows the unavoidable impact the earthquakes have had on the economy. It is crucial that the rest of the country takes up the opportunities for growth while the Canterbury region rebuilds."
Mr Joyce says businesses must be allowed to grow and create jobs.
"This includes the intensification of agriculture, the development of aquaculture, encouraging hi-tech industries and expanding oil and gas exploration."
There are now 162,000 people out of work and Labour's finance spokesman, David Parker, says that's an increase of 57,000 since National came to power in 2008.
"In addition, 150,000 have gone to Australia," he said.
"National's management of the economy isn't working, our regional heartland is being hollowed out, exporters are cutting jobs, businesses are closing and our young people are leaving in droves."
The party's youth affairs spokeswoman, Megan Woods, says 45,900 people aged 20 to 29 are out of work and the prospects for young people are "growing bleaker by the day".
Green Party co-leader Metiria Turei says the figures are testament to the government's failed economic management.
"It's more than three years since Prime Minister John Key promised New Zealand he would have an `unrelenting focus on jobs' and unemployment is still rising."