Unemployment drops by 14,000 in the West Midlands

But the number of people in work has also fallen, down by 2,000 to 2.6 million.

Nationwide the number of people in work has fallen by 56,000, the biggest quarterly drop in more than two years, new figures show. Much of that may be due to a dramatic drop in the number of self -employed people, down by 41,000.

There are just over 32 million people in employment, but the 56,000 reduction between August and October is the largest since the three months to May 2015, the Office for National Statistics (ONS) said.

Unemployment fell by 26,000 to 1.4 million, which is 182,000 lower than a year ago and the lowest it has been since 1975.

The claimant count, which includes people on Jobseeker's Allowance and the unemployment element of Universal Credit, increased by 5,900 last month to 817,500.

But in the West Midlands the claimant fell by 560 last month to 84,060. But that hid significant variations from district to district.

Most dramatically, in Dudley the number of people claiming unemployment related benefits rose by 215 to 6,180.

In Walsall it rose by just 15 to 4,790. In Sandwell, however, the claimant count held steady at 6,950, while in Wolverhampton it fell by 15 to 6,590.

In Staffordshire the count rose by just five, to 5,380, while in Cannock Chase it fell by 10 to 740. In Stafford it was down by 10 to 690 but in South Staffordshire it was up by 30 to 810.

In Kidderminster and Wyre Forest the claimant count was also down by 10, to 790.

Cathy Taylor, JobcentrePlus business development manager for the Black Country, said she thought the introduction of the new Universal Credit benefit in Dudley in July was responsible for the surge in the borough's claimant count in November as some people in work were now eligible to claim benefits.

Universal Credit was introduced into the Wolverhampton area this week and is expected to have a similar impact on claimant count numbers.

The drop in unemployment was partly down to recruitment by the Midland Metro Alliance plus in Wolverhampton opportunities around the i54 and nearby for warehousing roles. Also Royal Mail and retailers like Amazon had been recruiting for Christmas.

"The labour market is buoyant across the Black Country at this time of year," Cathy Taylor added.

Average earnings increased by 2.5 per cent in the year to October, 0.2 per cent up on the previous month, although pay is still growing at less than the rate of inflation. ONS figures revealed yesterday that CPI (consumer price index) inflation was now up to 3.1 per cent.

The number of people classed as economically inactive, including students, those on long-term sick leave, taken early retirement or who have given up looking for work, increased by 115,000 to 8.8 million.

The fall in employment was virtually all among full-time men, although the total employment figure of 32 million is 325,000 higher than a year ago.

Job vacancies were up by 14,000 to a record 798,000.

ONS statistician Matt Hughes said: "Employment stayed close to its record high and, while up on a year ago, declined compared with the previous three months.

"Unemployment also fell, but there was a rise in the number of people who were neither working nor looking for a job. Meanwhile the number of vacancies continue to grow, reaching a new record high.

"There has been a slight pick-up in pay growth in cash terms, which means that, although earnings are still growing less than inflation, the gap has narrowed."

Matthew Percival, head of employment at industry body CBI , said: “The number of people in employment has fallen, but the unemployment rate remains low and there are still opportunities for job seekers with vacancies at a record high.

“Pay growth is picking up a little, but rising inflation means that many people won’t feel the benefit yet. Raising productivity is key to turning this around. Progress from business and government on the Industrial Strategy must help to raise living standards across all parts of the UK.”

Other figures showed that public sector employment increased by 19,000 in September to 5.4 million, mainly due to an increase in the NHS workforce, which now stands at 1.6 million.

Central government employment increased by 29,000 over the past quarter to just over three million, mainly because of schools converting to academies, while the number of people employed in local government fell by 9,000 to 2.1 million, the lowest since records began in 1999.

Private sector employment fell by 75,000 to 26.5 million.