SYDNEY, Feb 4 (Reuters) - New Zealand's jobless rate rose to its highest in 10 years in the fourth quarter as an increase in people looking for work offset gains in employment, a mixed report that suggests interest rates will need to stay low for some time.

The local dollar pulled back slightly to $0.6045 NZD=D3 on the news, while interest rate futures bounced as the market pared the chance of any hike in the 2.25% cash rate, at least until September.

Figures from Statistics New Zealand showed the unemployment rate rose a tick to 5.4% in the December quarter, the highest reading since the third quarter of 2015 and above market forecasts of 5.3%.

That was also just above projections from the Reserve Bank of New Zealand, and a disappointment given other data recently had pointed to an improvement in the struggling economy.

With plenty of slack in the labour market, annual wage growth in the private sector remained subdued at 2.0% and well short of consumer price inflation at 3.1%.

Yet the news was not all dark, with employment rising by 0.5% in the December quarter, from the previous quarter, topping forecasts of 0.3% and the first gain in 18 months.

The participation rate also increased to 70.5% as more women entered the labour force, while underutilisation, which includes the unemployed and those wanting to work more hours, held steady at 13.0%.

"The data showed some early signs of improvement in the jobs market, despite a further small rise in the headline unemployment rate," said Michael Gordon, a senior economist at Westpac.

"What that means is there is little here to hurry the RBNZ quickly towards reversing rate cuts," he added. "Still muted wage pressures should imply there is time to assess the strength and durability of the recovery before raising rates."

The central bank has cut the official cash rate by 325 basis points since August 2024, but signalled in November an end to the easing cycle with rates projected to be on hold through 2026.

Investors see no chance of a move at the RBNZ's next policy meeting on February 18, with July tipped as the first window for a hike in the 2.25% cash rate. 0#NZDIRPR

RBNZ governor Anna Breman in January said that economic growth had been better than forecast and she was committed to guiding inflation to the midpoint of the bank's 1% to 3% target band.