Unemployment has fallen below 5 percent while the number of people in work has risen by 29,000 in the first three months of the year.
Official figures show the unemployment rate is at 4.9 percent, surprising analysts who expected it stay above 5 percent.
The number of unemployed people fell by 6000 to 132,000.
Westpac economist Satish Ranchod said the lower unemployment figures and strong jobs growth surprised analysts.
"Job growth we've been seeing are in sectors like hospitality, which has been benefiting from those strong tourist numbers, but are also in areas like construction and professional services."
He said there was a general positive move in the economy at the moment, which was reflected in the labour market.
However, demand for labour did not translate into strong wage growth.
Annual wage rises were subdued at 1.6 percent, below the rate of inflation.