The UK unemployment rate declined to a 48-year low in the first three months of the year, but wages were squeezed by surging inflation, according to data released on Tuesday by the Office for National Statistics.
The unemployment rate fell from 3.8% in the previous quarter to 3.7% – its lowest level since 1974. Analysts had been expecting it to hold steady at 3.8%.
At the same time, total earnings growth rose to 7% in March from 5.6% in February, but regular earnings growth excluding bonuses only ticked up to 4.2% from 4.1%. Adjusted for prices, average earnings excluding bonuses fell by 1.9% from a year earlier, marking the biggest drop since 2013.
The figures also showed that the number of vacancies in February to April rose to a new record of 1,295,000, up 33,700 on the previous quarter and 499,300 compared to pre-pandemic levels in January to March 2020.
ONS statistician Darren Morgan said: “While the economy was still growing in the first three months of 2022, there continued to be a mixed picture for the labour market.
“Total employment, while up on the quarter, remains below its pre-pandemic level. Since the start of the pandemic, around half a million more people have completely disengaged from the labour market.
“However, job vacancies are still rising, reaching yet another record high. Indeed, with the latest fall in unemployment, to its lowest rate since 1974, there were actually fewer unemployed people than job vacancies for the first time since records began.
“Continued strong bonuses in some sectors such as construction and especially finance mean that total pay is continuing to grow faster than prices on average, but underlying regular earnings are now falling sharply in real terms.”