Unemployment's set to edge higher despite signs of the job market improving. 

Stats NZ data, due out this morning, is expected to show the unemployment rate reached 5.3% in the September quarter. 

That's up from 5.2% in the June quarter. 

Westpac Senior Economist Michael Gordon told Mike Hosking the unemployment rate would be even higher if more young people were in the labour market. 

He says they've been first on the chopping block as the economy slowed, so many have gone back into school and aren't seeking work. 

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