Lack of full-time work and poor pay take gloss off rosy job figures Signs of stabilisation in the labour market were also dampened by figures revealing that average total earnings increased by just 0.6pc in the year to March, 0.5pc down on the previous month. Graeme Leach, chief economist at the Institute of Directors, said the figures raised "half a cheer for the economy." However, he warned: "The real squeeze in household incomes continues to act as a dragging anchor on consumption and high street spending." John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: "A very weak economy is managing to keep unemployment in check only by maintaining a severe squeeze on the size of pay packets and creating enough low productivity work to allow people to avoid the dole by doing the odd part-time job here and there." The unemployment rate fell to 8.2pc over the period, down from 8.3pc in the three months to February and below analysts" forecasts of 8.4pc. It is also well below the 10.9pc unemployment rate in the euro region. However, the number of people unemployed for more than two years rose by 5,000 to 428,000. The ONS said employers made more redundancies and had fewer vacancies over the period, with experts warning the double dip recession would dent confidence further leading to more job cuts. Average weekly pay in private firms in March was £2 lower, at £460, compared with a year ago, while the ONS said "output per worker" fell, suggesting productivity was suffering due to the continued pay squeeze and low morale. There were 9.25m economically inactive people over the period, a fall of 35,000, mainly due to a fall in the number of under-65s taking retirement, as employees work longer and the female state pension age increases. Employment Minister Chris Grayling said the figures were a "step in the right direction," adding most people working part-time were not looking for full-time jobs.