The expanding economy is encouraging firms to hire more people, though wages remain subdued.
Statistics New Zealand figures released on Wednesday show 150,000 people were unemployed in three months to September and the unemployment rate had fallen to 6.2% from 6.4% in the previous quarter.
Employment rose by 27,000 or 1.2% - the biggest improvement since before the 2008 recession - led by Auckland firms seeking more workers. Full time jobs increased, as did hours worked.
Northern Employers and Manufacturers chief executive Kim Campbell says the pick-up is widespread with firms in construction, retail manufacturing all seeking skilled workers.
The fall in unemployment did not match the pick-up in jobs, however, due to the stronger economy tempting more people to search for work.
The participation rate, which measures the proportion of people in jobs or looking for work, rose from a revised 68.1% to 68.6% - the third-equal highest level since the series began.
But wage growth continues to ebb, with annual pay rising 1.6%, its lowest increase in three years.
For the September quarter, wages rose 0.4%.
Most economists had expected employment growth of 0.5% and the dollar rose more than half a cent against the US currency on Tuesday morning following the surprise jump in the number employed.
Westpac chief economist Dominick Stephens says the rise is unjustified, because the main signal for inflation pressure is wages growth which is still benign.
Pay rises meagre, says CTU
Unions say businesses are using high unemployment to keep wages down.
Bill Rosenberg, chief economist at the Council of Trade Unions, says the stronger economy is not being reflected in pay packets.
"It's certainly very meagre increases there. Employers are making use of the higher unemployment to deny wage rises, basically. Only 54 percent - barely half of workers - got a pay rise in the last year."
Mr Rosenberg believes the fall in unemployment to 6.2% is too slow. Many people are still finding it hard to get work, he says, and the Government should set a target of 4% unemployment by the end of 2014.
