The Office for National Statistics said the number of UK workers on payrolls rose by 108,000 between December and January to 29.5 million.
The unemployment rate also reduced by 0.2 percentage points to 4.1 per cent over the three months to December. There were 1.37 million out of work
Meanwhile, total pay growth rose to 4.3 per cent for the quarter to December – from 4.2 per cent for the three months to November – but continued to lag behind inflation, which soared to a near 30-year high of 5.4 per cent in December.
The unemployment rate for the West Midlands for the three months to December was 147,000 – a rate of 4.9 per cent of the working population. The number in employment was 2.82 million.
Numbers claiming unemployment benefits, including Universal Credit, fell across the West Midlands in January by 3,115 from December to 197,850 – 5.4 per cent of the working population.
There were fewer people claiming unemployment benefits across Shropshire.
The county had a drop of 65 to 5,580 (2.9 per cent) with Telford and Wrekin also down by 95 to 4,715 (4.2 per cent).
Powys bucked the trend with a slight rise of 10 to 2,165 claimants – 2.9 per cent.
Chancellor of the Exchequer Rishi Sunak said: “Our £400 billion economic plan has protected our jobs market through the pandemic and it is now healthier than most could have hoped for.
“Payrolled employee numbers are at a record high and redundancies are at an all-time low thanks to our plan for jobs.
“We’re continuing to help more people into work and are providing support for the cost of living worth over £20bn across this financial year and next.”
Minister for Employment, Mims Davies, said: “Today’s figures show further positive signs of recovery, with unemployment continuing to drop and 436,000 people joining company payrolls since the start of the pandemic, a record high number of employees including more young and older workers.
“Through our Way to Work campaign we are making sure that anyone who is ready to work can get into a job faster than ever before, allowing them to progress to a fulfilling career, giving them financial independence as well as improved wellbeing.”
Sam Beckett, head of economic statistics at the ONS, said: “The number of employees on payrolls rose again in January 2022 and is now well above pre-pandemic levels.
“However, our labour force survey shows the number of people in employment overall is well below where it was before Covid-19 hit.
“This is because there are now far fewer self-employed people.
“The survey also shows that unemployment has fallen again and is now only fractionally above where it was before the pandemic.”
British Chamber of Commerce head of economics, Suren Thiru, said: “The striking increase in payroll employment in January suggests that Omicron had little effect on the UK labour market as demand for workers remained robust.
“While it is encouraging that payroll employment is rising and unemployment continues to fall, the strong headline figures masks significant underlying challenges.
“Record vacancies underscore the critical hiring crisis facing firms. With high economic inactivity indicating that many people have left the jobs market altogether, chronic staff shortages are likely to weigh on the UK economy for a sustained period.
“With regular pay growth slowing, inflation is comfortably outpacing wages, weakening household finances further. Despite recruitment difficulties, the damage being done to business cashflow from a myriad of cost pressures is limiting the extent to which wages can rise.
“While Omicron is having little impact on employment, the squeeze on firms’ finances from high inflation, soaring energy bills and the looming national insurance hike is likely to weaken job creation and further restrain pay growth in the coming months.
“The Government must do more to help people access rapid retraining opportunities for in-demand jobs, including helping older workers to pivot to more sustainable jobs. Delaying the looming National Insurance rise would give firms the financial headroom to retain and recruit people.”