The number of UK workers on a payroll has jumped to a new record - but wage growth is still failing to keep up with the cost of living crisis.
Those on a payroll system rose by 275,000 between January and February to 29.7 million, the Office for National Statistics said.
Average earnings growth for regular pay, not including bonuses, was 3.8% in the three months to January - lagging behind soaring inflation which is currently at 5.5%.
That meant wages fell by 1% in real terms when taking into account the cost of living, the ONS said - the steepest decline since July 2014.
Wages including bonuses were up by 4.8%, though this is still only a 0.1% real terms increase.
Experts say inflation could jump higher still over the next few months - with some suggesting it could hit more than 7%.
Meanwhile, the unemployment rate lower than expected at 3.9%, down from 4.1% in the three months to December.
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But the figures also highlight a growing struggle for businesses trying to recruit new workers.
The number of vacancies in the three months to February hit a new record of just over 1.3 million, the ONS said.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: "The labour market continues to recover from the effects of the pandemic, with the number of unemployed people falling below its pre-pandemic level for the first time and another strong rise in employees on payroll in February."
He continued: "However, the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level.
"We have seen yet another record number of job vacancies, and with the redundancy rate falling to a new record low, demand for workers remains strong.
"Because bonuses have continued at high levels for some workers, total earnings growth just kept ahead of rising prices over the past year, though regular pay has dropped again in real terms."
Minister for Employment, Mims Davies MP said: “These figures show unemployment remains low, below pre-pandemic levels for the first time, and employment is continuing to grow, providing a stable foundation as new global challenges emerge.
"With record numbers of vacancies out there, our focus is on helping people build their skills and improve their prospects by moving into work.
“We are connecting thousands of job-ready claimants to live opportunities, giving them a platform to progress and pursue a career.
“To achieve this, we are working with a wide range of sectors to create and maintain a workforce that is skilled, productive, reliable and resilient.”
