Some economists say unemployment is likely to remain above 6% over the next year, after rising to its highest levels in two years.
Official figures show the number of people out of work stood at 162,000, or 6.8%, in the three months to June, due to a fall in part time jobs.
The rise in unemployment, a decline in jobs and fewer people looking for work surprised financial markets, prompting the New Zealand dollar to lose a cent against its American counterpart.
BNZ senior economist Craig Ebert says the unexpected result could be due to jitters over what's been happening in Europe, with employers reluctant to take on more staff.
Infometrics economist Matt Nolan says overall the labour market seems weak, underpinned by a high currency and the fact that labour is expensive.
He says labour market conditions mean that as well as people with no jobs, there are a lot of working people who are not doing as many hours as they would like.
Mr Nolan says Infometrics collates an under-employment rate which it puts at 11.3% and that includes people who want to work more hours and those who don't have jobs at all.
He says the figures show there's more spare capacity in the economy, and he's picking unemployment to stay above 6% over the next year.
Mr Nolan says he agrees with the Reserve Bank's approach to keep monetary conditions as they are now because lending, house sales and consumer spending are picking up.
"But the fact that we've got high unemployment now and that's stayed high persistently, is symptomatic of previous monetary policy failure".
But Mr Ebert's nervous about inflation pressures building up over the medium term.
He says the economy is picking up, and it won't take much to ignite inflation.
Westpac chief economist Dominick Stephens says economic growth was reasonably robust in the June quarter, but it takes time for that to translate into firms hiring more workers.
Mr Stephens says he's not expecting substantial reductions in jobless rates until later this year, when construction efforts in Christchurch and Auckland pick up speed.
He says that may lead to a two-speed economy over time and the demand for construction activity in Canterbury and Auckland may drive costs higher in other parts of the country and act as a drag on economic growth there.
Economists are picking the rise in unemployment will further delay the Reserve Bank hiking interest rates, which hadn't been expected until the March quarter of next year at the earliest.
