The number of people claiming jobseeker's allowance has fallen to a near two-year low after a huge increase in employment, new figures show.
Almost 30 million people were in work at the end of 2012, an increase of 154,000 on the quarter to September, and the highest total since records began in 1971. The so-called claimant count fell for the third month in a row in January, down by 12,500 to 1.54 million, the lowest since June 2011.
Unemployment, including those not eligible for benefit, fell by 14,000 in the final quarter of last year to 2.5 million - 156,000 lower than a year ago. But youth unemployment increased by 11,000, the highest rise for a year, and the number of people with more than one job increased by 41,000 to 1.1 million.
The number of people classed as economically inactive, including long-term sick, people looking after a family or those who have given up looking for work, fell below nine million, the lowest figure since the autumn of 2006.
The Office for National Statistics (ONS) also reported a continued cut in the real value of pay, with average earnings increasing by 1.4% in the year to December, down by 0.1% on the previous month. Regular pay, excluding bonuses, rose by 1.3%, the lowest figure since the end of 2009.
The ONS noted that CPI inflation was running at 2.7% last year, with the annual growth in weekly wages staying below inflation since the middle of 2009.
The number of people in full-time jobs increased by almost 200,000 at the end of last year to 21.6 million, while part-timers fell by 43,000 to just over eight million. The number of self-employed workers increased by 25,000 to 4.2 million. Youth unemployment, counting 16 to 24-year-olds, rose by 11,000 to 974,000, the biggest increase since the start of last year.
Secretary of State for Work and Pensions Iain Duncan Smith pointed to figures showing a 15,000 fall in the number of people out of work for over a year, to 879,000. He said: "The fall in long-term unemployment is particularly welcome and shows that the training and support we are offering is helping people move off benefits and into work. These figures show another big increase in full-time jobs, half a million more British people in work over the past year and more women in employment than ever before."
Paul Kenny, GMB general secretary, said: "That we have mass unemployment of two-and-a-half million five years into this recession is waste on a grand scale. To this must be added the millions in enforced temporary and part-time jobs and those massively underemployed. What is tragic is that there is no light at the end of the tunnel as we are in the middle of a triple dip recession."
Shadow work and pensions secretary Liam Byrne said: "Today's fall in the headline rate of unemployment is welcome but it is now clearer than ever that British workers are paying the price to get a job or keep a job... What Britain now needs from next month's Budget is an industrial strength back-to-work programme to match the crisis we face."