Millions of families face a miserable Christmas as even Prime Minister David Cameron was forced to admit today that unemployment remains "stubbornly high."
Although the number of people out of work fell by 82,000 in the last quarter up to October, there are still 2.51 million people out of work in Britain.
The GMB union said that the government's failed deflation policy was causing a triple-dip recession.
GMB leader Paul Kenny said: "Millions of families face another miserable Christmas, the sixth since the recession started in 2007, with little hope of things getting better.
"The UK economy is going in the wrong direction with no growth and more debts. This is the exact opposite of what Osborne intended. By contrast the USA, which stuck with the policies he inherited, has recovered and is growing.
"Last week at the Autumn Statement it became clear that Osborne is in denial with his claim that the economy is making progress and that the cuts are hitting people in a fair way.
"He says that austerity will last till 2018 but he is likely to be sacked by the electorate well before then for stalling the recovery he inherited."
Public sector employment also fell for the 12th consecutive quarter by 24,000 to 5.7 million, the lowest since 2002.
Employment in the Civil Service was cut by 3,000 to 455,000, the lowest since records began in 1999, while local government employment also fell to a record low of 2.5 million after a cut of 32,000.
TUC leader Brendan Barber said that women, who are bearing the brunt of public-sector job losses, will be concerned that two in three new jobs are going to men.
"There is still a long way to go before our labour market returns to full health," he said.
"We need a million more jobs to get back to where we were five years ago and more action to help the quarter of a million young people who have been out of work for at least a year.
"We now need strong economic growth to generate a million more jobs and get wages rising again."