The Government was given some pre-Christmas cheer on the jobs front when the number of people in work reached a record high after the biggest quarterly fall in unemployment for more than a decade.
The jobless total fell by 82,000 in the three months to October to 2.51 million, down by 128,000 on a year ago and the biggest reduction of its kind since the spring of 2001.
Employment jumped by 40,000 to 29.6 million, the highest figure since records began in 1971 and up by half a million on a year ago, but the number of workers in the public sector has continued to slump.
Prime Minister David Cameron told MPs: "Obviously there is no room for complacency - there are still far too many people who are long-term unemployed.
"But in these figures we can see 40,000 more people in work, vacancies are up, unemployment is down by 82,000, the claimant count is down. Over a million extra private sector jobs under this Government."
The Government announced it was extending the Youth Contract wage incentive, which gives employers up to £2,275 if they take on an unemployed young person.
From next week it will be available for employers taking on any 18 to 24-year-old in Britain who has been claiming benefits for six months, three months earlier than at present.
Business leaders welcomed the change but warned that too few employers knew about the Youth Contract.
Adam Marshall, director of policy and external affairs at the British Chambers of Commerce, said: "Ministers must also re-consider their moves to reduce professional careers education in schools and commit to ensuring that every young person leaves formal education with an understanding of the employment opportunities available and the skills and behaviours required to achieve their potential."
Employment minister Mark Hoban said the figures, from the Office for National Statistics, showed that the private sector was creating more jobs than were being lost in the public sector.