New Zealand's unemployment rate of 7.3 percent overstates the weakness of the labour market, which has been tapering off through the latter half of this year, the Reserve Bank says.
The bank's latest forecast is more downbeat about the level of unemployment over the next two years, but isn't convinced joblessness is at a 13-year high as shown in Statistics New Zealand's household labour force survey - the official barometer.
The HLFS figures contrasted with those in the quarterly employment survey, falling numbers of unemployment beneficiaries, rising wage inflation and reports that employers are still finding it hard to attract staff.
"Looking at a broad range of measures, momentum in the labour market has weakened somewhat over the end of 2012," the bank said in commentary included in Thursday's three monthly monetary policy statement.
"We believe this deterioration is less severe than the HLFS would suggest."
The central bank expects unemployment of 7.1 percent in the March 2013 year, falling to 5.9 percent in 2014 and 4.9 percent in 2015.
That's more pessimistic than the 6.4 percent, 5.3 percent and 4.9 percent it forecast in September.
A rising unemployment rate has surprised economists in the past three quarters, with the spike in September attracting scepticism while also pointing to a lull in what seemed a more strongly recovering economy.
Jobs growth in recent years has largely been underpinned by increasing numbers of part-time staff at the expense of full-timers, though the Canterbury rebuild is seen as a likely candidate to mop up spare capacity in the labour market.