The ONS UK Labour Market statistical bulletin for March, which covers the three months to January 2016, revealed that there were 116,000 more people in work than in the previous three-month period.
Record high employment
From November to January, the total number of people in work reached 31.42 million, an increase of 478,000 (1.5 per cent) from the same period a year ago.
Some 74.1 per cent of people aged 16 to 64 were in work, according to the figures – the joint highest employment rate since comparable records began in 1971.
Unemployment rates fell from 5.7 per cent a year earlier, to 5.1 per cent. This represents 1.68 million people, 28,000 fewer than in the period from August to October.
In addition, average weekly earnings rose by 2.2 per cent compared with a year ago.
High costs slow down wage growth
The Federation of Small Businesses (FSB) welcomed the positive figures, but said that challenges for SMEs – such as pensions changes, taxation, and the introduction of the Living Wage – meant businesses are doing what they can to keep costs down, including not increasing wages as much as might be expected.
Mike Cherry, FSB policy director, said: “Unemployment is historically low, but we are seeing a slowdown in recruitment and the persistence of weak wage growth. This should be taken as a warning sign that businesses are starting to become concerned about a number of emerging economic headwinds.
“Small businesses are dealing with a growing number of new or unexpected costs including higher than expected minimum wage increases, auto-enrolment deadlines and changes to how dividends are taxed. To meet these challenges employers are looking for ways to keep costs down and this is translating into slower than expected wage growth.”
The small business rate relief and infrastructure investment announced yesterday in the Budget will go some way to deliver the “real progress” the FSB called for.