Economic confidence has managed to escalate, as unemployment drops, shares Prime Minister John Key.

Short term Government schemes and seasonal trends can be the possible reasons behind the reduction. Key shares that employers are really cautious while hiring new people. He also adds that the figures are truly a good sign for the economy, but it is still a long way to go.

The figures reveal that the number of people getting the Unemployment Benefit came down by 4224 in February, while the number of benefits slumped by 10,816.

It was the largest drop since the recession period began.

Social Development Minister Paula Bennett said, "It's really pleasing to see 5595 young people came off a benefit in just the last month. While this is early days and the effects of the recession are still being felt; there is light at the end of the tunnel".

About 3636 youngsters got placed through the Government's Job Ops scheme and about 2927 positions were filled via Community Max.