Record number in work as jobless total falls by 63,000

Just over 30 million people are now in jobs, up by 459,000 on a year ago, the highest figure since records began in 1971.

The jobless total fell by 63,000 in the quarter to January to 2.33 million, a rate of 7.2%. Most of the fall was among men.

The number of people claiming jobseeker’s allowance in February fell by 34,600 to 1.17 million, the 16th consecutive monthly reduction, while vacancies jumped by 23,000 to 588,000, the most since 2008.

The Office for National Statistics also reported a fall in the number of people working part-time because they could not find full-time work - down by 32,000 in the latest quarter to 1.4 million, although still 41,000 higher than a year ago.

Youth and long-term unemployment both fell, with those out of work for over a year down by 38,000 to 828,000, while 912,000 people aged between 16 and 24 were jobless, down by 29,000.

The number of people classed as economically inactive, including long-term sick, those looking after a relative or who have given up looking for work, fell by 19,000 to 8.9 million, including the lowest number of women on record (5.6 million).

Public sector employment has fallen by 159,000 to 5.5 million, the lowest since December 1999, although most of the reduction was explained by Royal Mail workers moving to the private sector because of the postal group’s privatisation.

Local government employment fell by 25,000 to 2.3 million and by 6,000 in the civil service to 441,000. Private sector employment is now 662,000 higher than a year ago.

The unemployment rate, now 7.2%, is no longer linked to the Bank of England’s pledge to keep interest rates at record lows after governor Mark Carney unveiled new forward guidance. The bank had pledged not to consider a rate rise until unemployment fell to 7%.

Employment Minister Esther McVey said: “We now have the highest employment rate for five years, which shows that the growing economy is helping record numbers of people to find a job, turn their lives around and have the security of a regular wage.

“The rise in employment is being fuelled by businesses and entrepreneurs across the country who are feeling increasingly confident with the improving economy. They should be congratulated for creating over 1.7 million private sector jobs since 2010 - that’s over 1,000 more people in private sector jobs every day.”

Paul Kenny, GMB general secretary, said: “This has been the longest recession in living memory. The Government has to show more urgency to help its main victims, nearly one million young workers out of work, into proper jobs. GMB will assess today’s Budget on what it does to avoid a lost generation.”

David Cameron tweeted: “Another significant fall in unemployment is a sign our long-term economic plan is working, providing security & chances for hard-working people.”

Rachel Reeves, shadow work and pensions secretary, said: “While today’s fall in overall unemployment is welcome, the figures show 912,000 young people are unemployed and long-term youth unemployment has doubled under David Cameron. It’s clear tens of thousands of young people are not feeling any recovery at all.

“There has also been a worrying rise in the number of people unemployed for over two years.

“Today’s figures also show that working people facing a cost-of-living crisis and that prices are still rising faster than wages under David Cameron.”

TUC general secretary Frances O’Grady said: “The economy is generating jobs but too many are insecure and poorly paid.

“The fall in the number of employees is especially worrying for women as recent figures showed a 42% gender pay gap among self-employed workers, with most women earning less than £10,000.

“So far economic growth has failed to improve job security or generate decent pay rises. This must change if the benefits of recovery are to be felt by hard-working people.”

David Kern, chief economist at the British Chambers of Commerce, said: “These figures show that while the UK labour market remains strong and flexible, the pace of improvement is slowing. Youth unemployment edged down slightly, but with the rate at 19.8%, it is still nearly three times the rate of unemployment as a whole.

“While earnings growth increased slightly it remains below inflation. For pay to increase further, we need to see similar increases in productivity in order to sustain it.

“Overall the jobs market is still improving, and suggests that the recovery is making progress. Against this backdrop, in his Budget speech we hope that the Chancellor makes every effort to tackle youth unemployment, while introducing measures to boost investment and exports.”

Unite general secretary Len McCluskey said: “While the drop in unemployment by 63,000 is to be welcomed, this can’t disguise the thrust of government policy which is towards a low waged economy where insecure employment is rampant.

“Urgent measures are needed in today’s Budget and in the coming months to tackle the two large pools of persistent unemployment - the young and the long term jobless - that continue to be a thorn in the side of the chancellor.

“We can’t tolerate an economic landscape that offers precious little hope of real jobs for our young people.

“Too much of what good economic news there has been is skewed towards London and the South East.”

Unison general secretary Dave Prentis said: “The small drop in the number unemployed is hardly something to celebrate as it masks the reality of the rising number of those underemployed with zero hour contracts, or forced to take part time jobs because they cannot find full-time employment.

“The state of the labour market still remains a major issue. Today’s figures show that the Government’s austerity measures are continuing to bite into public services, with another 25,000 local government workers forced out of work. Today’s Budget is a opportunity for Osborne to reverse some of his drastic measures and alleviate the pain of the six million working people living in poverty.”

Dr John Philpott, director of The Jobs Economist, said: “At last we are seeing signs that the economic recovery is breathing life into the pay figures. The combination of job vacancies rising back toward the pre-recession level and falling unemployment has lifted pay growth to within sight of price inflation, especially in the private sector where the real pay squeeze eased markedly around the turn of the year.

“It is now very likely that the average real pay squeeze will end in the coming months, with private sector workers set to enjoy real pay rises for the first time since 2009.”

Ian Brinkley, chief economist at The Work Foundation, said: “These figures tell us that current forecasts that unemployment will fall towards 6% by the end of 2015 are entirely plausible.

“It is all the more important that the 2014 Budget sets out effective measures to ensure that disadvantaged groups, such as less qualified young people, can also take advantage of these new opportunities. And the challenge remains to translate growth into improved productivity and higher pay alongside more jobs.”

John Allan, chairman of the Federation of Small Businesses, said: “Today’s unemployment figures indicate further improvement in the jobs market and match reports we’ve been hearing from our members. Many have told us they have recently increased their headcount and they expect to employ more staff in the next quarter.

“As confidence in the economy grows, it is important that the momentum of previous quarters is maintained and this can only be achieved by maximising the job creation potential of small businesses.”