Statistics New Zealand released its labour market data on late Tuesday evening. The unemployment rate dropped to 5.3% in the fourth quarter from 6.0% in the third quarter, beating expectations for a rise to 6.1%.
Employment increased 0.9% in the fourth quarter, exceeding expectations for a 0.8% gain, after a 0.5% fall in the third quarter. The third quarter's figure was revised down from 0.4% decline.
The participation rate declined to 68.4% in the fourth quarter from 68.7% in the third quarter.
"Although the number of employed people has risen, there was also growth in the number of people not participating in the labour market. This has contributed to labour force participation falling for the third quarter in a row," labour market and household statistics manager Diane Ramsay said.