The UK jobs market recovered strongly in April as coronavirus restrictions eased and the economy began to reopen from the latest lockdown.
The official unemployment rate fell slightly to 4.8 per cent in the three months to March, down from 4.9 per cent previously, the Office for National Statistics said.
Job vacancies increased and the number of workers on company payrolls rose 97,000 between March and April – the fifth successive month of growth – but remains 772,000 down compared to pre-pandemic levels.
Hospitality workers, people aged under 25 years and those living in London have experienced the biggest falls in employment, the ONS said.
With millions of people remaining on full or partial furlough, total hours worked remain well below the number seen in February last year, prior to the first coronavirus restrictions being imposed.
After allowing for inflation, average regular pay in January to March 2021 was up 3.6 per cent on the year. Average total pay, including bonuses, was up 3.1 per cent.
However, these figures distort the true picture because the average is pushed up by large numbers of lower-paid workers, in industries such as the arts and entertainment and hospitality, falling out of the jobs market.
Darren Morgan, director of economic statistics at the ONS, said: “The number of employees on payroll rose strongly in April as the economy began to reopen, continuing the improvement from its November trough.
“There remains, however, three-quarters of a million people fewer on the payroll compared with the pre-pandemic peak.
“With many businesses reopening, the recent recovery in job vacancies continued into April, especially in sectors such as hospitality and entertainment.
“The renewed lockdown at the beginning of 2021 saw a sharp rise in the number of previously unemployed people no longer looking for work, helping the unemployment rate to fall on the quarter.
“This mirrored what happened during the first lockdown.”
Latest figures show that redundancies slowed significantly to 204,000 in the three months to February, down from 308,000 and a record high of 395,000 in the three months to November last year.
Looking ahead, economists still expect unemployment to rise when the furlough scheme ends on 30 September.
The EY Item Club now forecasts unemployment will hit 5.5 per cent in the final quarter of this year, down from the 5.7 per cent it previously predicted.
Jonathan Reynolds, Labour’s shadow work and pensions secretary, said the government risked allowing a generation of young people to be “scarred by unemployment”.
"While it is encouraging to see businesses reopen with the easing of restrictions, long-term unemployment is rising at its fastest rate in over a decade,” he said.
“Young people continue to bear the brunt of the crisis, with over half of the fall in employees being under 25, yet the government’s Kickstart Scheme has provided opportunities for just one in 25 young people.”
Analysis of the data by union umbrella group the TUC found that joblessness has risen three times as fast among black and minority ethnic (BME) workers as white workers. Around one in 11 BME workers are now unemployed, compared to one in 25 white workers, according to the TUC’s calculations.