The rate of increase in the number of new claimants last month was just 0.7 per cent - its lowest level since the beginning of the pandemic 16 months ago.
Figures released by the Department of Work and Pensions (DWP) show the number of claimants for the four weeks to June 10 was 27,229 people compared to 27,029 for the previous month.
In the early months of the pandemic the rate of increase hit the 25 per cent mark but has dropped back significantly over the last few months.
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However, the rate of change for Peterborough is still higher than that for the East of England - 0.3 per cent to 495,967 people - and England - 0.4 per cent to 5,193,746.
A DWP spokeswoman said: “The figures are going in the right direction.
“People are feeling a lot more confident and are spending again and the economy is starting to open up.
“We are back to pre-Covid numbers of new claims.
“It has been a battle for 16 months with a huge increase in the number of claims. It’s nice to see the figures going back to normal.”
With the furlough scheme set to end in September, the spokeswoman said there was concern about the uncertainty around its possible impact on claimant numbers in the coming months.
But she said the biggest task for DWP staff at the moment was getting people back into work.
She said: “It is a massive task but there are plenty of vacancies about.”
To drive the return to work, the DWP last month opened a temporary Jobcentre in Northminster House, in Northminster Road, Peterborough, which itself could create up to 80 jobs.