The government acknowledged on Tuesday that unemployment has increased by 62,500 since it came to power in 2008.
But Employment Minister Steven Joyce told opposition MPs who were attacking him in parliament that National inherited an economy already in a domestically-generated recession.
"Since then there's been the small matter of the global financial crisis and the earthquakes in Christchurch," he said.
"Despite that, the economy has been growing steadily."
Labour and the Greens also questioned Mr Joyce about the manufacturing sector, saying the high exchange rate was forcing businesses to cut staff.
Mr Joyce said the sector was in decline in 2008 and had grown in 2010 and 2011.
He challenged Green Party co-leader Russel Norman to reverse his policies and support sectors like mining if he wanted to see jobs created.
"The Greens protest about mining... look across the Tasman and see that Western Australia has the lowest unemployment because it's economy is based on mining," he said.