The Hunter's jobless rate rose by more than one percent last month but it is still below the figure for New South Wales.
Bureau of Statistics figures show the unemployment rate in September increased to 5.2 per cent for Newcastle and the Hunter compared to 4.1 percent in August.
In NSW it fell slightly to 5.6 per cent last month.
Hunter Valley Research Foundation senior researcher Jenny Williams says a rise of around two percent in the participation rate is a positive sign.
"The proportion of people aged over 15 are offering themselves for work, so they either have a job or actively looking for work," she said.
"In the longer term we expect that to sort of trickle down as older workers retire but it's holding up very well at the moment."
Ms Williams says the region's job figures are still positive despite a rise in the unemployment rate.
She says overall the Hunter is still doing better than the rest of New South Wales.
"The trend level though is still reasonably flat at around five percent and still below New South Wales and New South Wales has been doing a little better than the nation as a whole," she said.
"What has happened is that in fact the total employment in that last read has lifted a little bit.
"It's been holding up very well."