New figures show the number of people unemployed in the UK fell by 49,000, to 2.46 million during the first three months leading to June this year.
It is the second consecutive month the number of people jobless has fallen, and is the biggest drop in three years.
The number of people employed increased by 184,000, the largest quarterly rise since 1989, the Office of National Statistics (ONS) said.
The claimant count for those seeking unemployment benefit in July fell by 3,800 to 1.46 million.
The rise in employment was largely the result of an increase in the number of part-time workers of 115,000, taking the total to 7.84 million, the highest figure since comparable records began in 1992, the ONS said.
There was an increase of 68,000 of the number of full-time workers on the quarter to reach a total of 21.18 million.
The rate of unemployment however, remained the same at 7.8%.
The Office of National Statistics also said that average pay was up by 1.3% on a year earlier, a slower annual rate of growth than in the previous three months.
Some analysts however focused on the small change in the number of people seeking unemployment benefits, saying this was further evidence that the economic recovery was starting to lose momentum.
David Page at Investec said, “The claimant count fell less than expected and that does raise concerns that recovery from here could be slower”.
Vicky Redwood from Capital Economics said, “This might be a sign that the slowdown in the wider economic recovery is already spreading to the labour market, and with sharp public sector cuts looming, we still that that renewed rises in unemployment lie ahead”.
This news comes weeks after the UK economy reported a record rate of growth for GDP.