Jeremy Hunt hails resilient jobs market but wages are still tumbling

Jeremy Hunt today hailed figures showing the jobs market defying the economic slowdown – but real-terms wages are still tumbling and long-term sickness has hit a new record.   

The Chancellor said unemployment is still ‘close to historic lows’ despite official figures showing the rate nudging up from 3.7 per cent to 3.8 per cent in the three months to February.

But the figures also showed employment rising to from 75.7 per cent to 75.8 per cent during the period as people returned to the jobs market amid the cost-of-living crisis. This masked another increase in long-term sickness, up around 422,000 since before Covid. 

Meanwhile, vacancies fell by 47,000 but still stood at an impressive 1.1million in the three months to March.

Pay continues to be outstripped by surging inflation, with total wages including bonuses up 5.9 per cent – but down by 4.1 per cent when headline CPI is taken into account.

Worryingly for the Bank of England, which is trying to keep a lid on prices, regular private sector wages were increasing faster than expected at 6.9 per cent. 

Jeremy Hunt today hailed figures showing the jobs market defying the economic slowdown – but real-terms wages are still tumbling and long-term sickness has hit a new record

Mr Hunt said: ‘While unemployment remains close to historic lows, rising prices continue to eat into pay cheques which is why halving inflation this year is one of our top economic priorities.

‘To help families in the meantime, we are making work pay with a record increase in the National Living Wage, while providing cost of living support worth an average of £3,300 per household this year and last, funded through windfall taxes on energy profits.’

The ONS said the dip in vacancies reflects ‘uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment’.

Director of economic statistics Darren Morgan said: ‘With the number of people neither working nor looking for a job down again, there were rises in both those in work and those actively looking for a job. However, while the group outside the labour market – termed ‘economically inactive’ – fell, the number among them who were long-term sick rose to a new record high.

‘Job vacancies have fallen again but remain at very high levels. Meanwhile pay continues to grow more slowly than prices, so earnings are still falling in real terms, although the gap between public and private sector earnings growth continues to narrow.

‘The number of days lost to strikes picked up again in February, after January’s sharp fall, albeit not to the levels seen before Christmas. Once again education was the most affected sector, accounting for over three-fifths of the total.’

Employment minister Guy Opperman said: “Helping more people into work will deliver on our priority to halve inflation and grow the economy, while tackling labour shortages. 

‘Today’s figures are encouraging, and I remain focused on supporting those on the lowest incomes to progress in work and build a steady and sustainable future.’