By James Tapsfield, Mailonline’s Political Editor
08:01 Apr 18, 2023 Updated at 08:27 Apr 18, 2023
Today, Jeremy Hunt lauded figures that show the labor market is defying the economic slowdown – but wages in real terms are still falling and long-term illness has hit a new record.
The chancellor said unemployment remains “near historic lows” despite official figures showing the rate rising from 3.7 per cent to 3.8 per cent in the three months to February.
But the figures also showed an increase in employment from 75.7 percent to 75.8 percent during the period as people returned to the labor market amid the cost of living crisis. This masked another increase in long-term illness, up by about 422,000 since before Covid.
Meanwhile, job vacancies decreased by 47,000 but still stood at 1.1 million in the three months through March.
Inflation continues to outpace wages, with total wages including bonuses rising 5.9 per cent – but down 4.1 per cent when headline CPI is taken into account.
Of concern for the Bank of England, which is trying to rein in rates, normal private sector wages were rising faster than expected at 6.9 per cent.
Hunt said: “While unemployment remains near historic lows, rising prices continue to eat away at paychecks which is why halving inflation this year is one of our top economic priorities.
To help families in the meantime, we’re getting paid to work with a record increase in the national living wage, with cost of living support savings averaging £3,300 per household this year and last, funded by windfall energy dividend taxes. “
The ONS said the decline in job vacancies reflects “uncertainty across industries, with respondents continuing to point to economic pressures as a factor in curbing hiring”.
Director of Economic Statistics Darren Morgan said: “With fewer people not working and never looking for a job again, there have been increases in both those who are working and those who are actively looking for a job. However, while the group is out of the labor market – which is called On them “economically inactive” – decreased, the number of patients among them who were long-term patients rose to a new record high.
“Vaccancies have fallen again but are still at very high levels. Meanwhile, wages continue to grow more slowly than prices, so profits are still falling in real terms, although the gap between public and private earnings growth continues to narrow.
The number of days lost to strikes picked up again in February, after falling sharply in January, though not to the levels they were before Christmas. Again, education was the hardest hit sector, accounting for more than three-fifths of the total.
Labor Secretary Jay Opperman said: “Helping more people work will meet our priority of halving inflation and growing the economy, while also addressing labor shortages.
“Today’s numbers are encouraging, and I remain focused on supporting low-income earners to get ahead in work and build a stable and sustainable future.”