The number of people in work has reached a record high of almost 30 million after a new fall in unemployment.
Just under 2.5 million people were out of work in the three months to August, down by 18,000 on the previous three months, while figures showed the biggest monthly fall in jobseeker's allowance claimants for 16 years.
The so-called claimant count has now been cut for 11 consecutive months after September's fall of 41,700 to 1.35 million.
Employment rose by 155,000 to 29.87 million, the biggest total ever recorded, giving a rate of 71.7%.
People classed as economically inactive also fell, by 83,000 to 8.95 million, while job vacancies rose by 6,000 over the latest quarter to 541,000, the highest for five years.
But today's data from the Office for National Statistics also showed that 1.45 million people were working part-time because they could not find full-time jobs, the highest figure since records began in 1992.
Average earnings growth fell back from 1.2% to 0.7% for the year to August compared to the previous month.
Average weekly earnings in private firms increased by 1.1%, but the annual growth rate in the public sector slumped to minus 0.5%, the lowest since 2001.
The latest figures showed a 69,000 increase in male full-time employment and 21,000 increase in part-time employment, while the number of women in part-time jobs fell by 13,000 compared with a 79,000 rise in full-time female employment.
There were 958,000 unemployed 16 to 24-year-olds in the latest three months, down by 1,000 over the quarter.
More than 1.1 million people have been unemployed for up to six months, down 32,000, but those out of work for between six months and a year rose by 29,000 to 446,000.
The number of people out of work for over a year fell by 15,000 to 900,000.
Employment Minister Esther McVey said: "Today's figures show a rise in employment of more than a million under this Government, and they show that there are now more people in work than ever before.
"That's a really positive sign of growth in the UK economy, and a credit to British businesses for creating those jobs.
"We are not complacent - there's still work to do - but with more than 500,000 vacancies currently available, and with all the signs being that the economy is turning a corner, we can see that there are opportunities out there for hardworking people who aspire to get on in life."
GMB general secretary Paul Kenny said: "That we have mass unemployment of two-and-a-half million six years into recession shows the human costs caused by the excesses of the bankers.
"Young workers have borne a heavy brunt. It has also taken a toll on the living standards of almost the whole working population."
Regional unemployment between June and August:
Region Total unemployed Change on quarter Unemployment rate
North East 133,000 minus 2,000 10.3%
North West 294,000 plus 24,000 8.6%
Yorkshire/ Humber 242,000 minus 6,000 8.8%
East Midlands 177,000 plus 1,000 7.7%
West Midlands 254,000 minus 14,000 9.4%
East of England 185,000 minus 20,000 5.9%
London 372,000 plus 4,000 8.6%
South East 273,000 minus 12,000 6.0%
South West 172,000 plus 16,000 6.3%
Wales 120,000 minus 1,000 8.0%
Scotland 201,000 minus 3,000 7.3%
Northern Ireland 63,000 minus 5,000 7.3%
Shadow work and pensions secretary Rachel Reeves said: "The small fall in unemployment is welcome but there are still far too many people chasing too few jobs, and for those in work the cost of living crisis continues, with prices now rising faster than wages for 39 out of the 40 months since David Cameron became Prime Minister.
"Working people are now on average more than £1,500 a year worse off under this out-of-touch Government.
"Unacceptable levels of youth unemployment, long term unemployment and rising underemployment continue to do deep and lasting damage to people's lives and our country's economic prospects. We need a recovery that benefits everyone, not just a few at the top."
TUC general secretary Frances O'Grady said: "While it's good news that unemployment is still falling and more jobs are being created, there is still plenty to be worried about.
"Young people are being excluded from the recovery as youth joblessness remains close to a million. The Government must admit its Youth Contract is failing and introduce a jobs guarantee to stop thousands more joining the dole queue.
"People's pay packets continue to fall in real terms. Earnings growth has never been lower and the longest wage squeeze in over a century is becoming even tighter."
David Kern, chief economist at the British Chambers of Commerce, said: "Although concerns remain over youth and long-term employment, the figures show that Britain's labour market is strong and flexible, and that the economy should record satisfactory growth in the third quarter.
"The large fall in inactivity is particularly pleasing, as more people are returning to the workforce and are looking for jobs."
University and College Union general secretary Sally Hunt said: "Politicians might argue about the marginal differences in today's figures, but the bottom line is that we still have around a million young people who can't find work and record levels of people in part-time employment, because there simply are not the jobs out there.
"Our analysis of average pay suggests this is a problem for young people in particular. More than any other group, 16 and 17-year-olds have seen their pay slashed and are more likely to be paid less than the minimum wage.
"Young people are the unacknowledged victims of the recession and have also faced rocketing tuition fees and the disappearance of college grants."
Graeme Leach, chief economist at the Institute of Directors, said: "Just as employment losses during the recession were lower than expected, so too are employment gains with recovery. This isn't a jobless recovery but it is a job-lite one.
"Over the course of the next year we expect the picture to improve as higher output stimulates higher productivity and a subsequent pick-up in both employment and wage growth."
John Allan, chairman of the Federation of Small Businesses, said: "The pace at which unemployment is falling remains frustratingly slow, however the news of more vacancies matches FSB findings that small firms are seeking to take on more staff.
"While we still have concerns over long term unemployment and the figures on wages are worrying, our research shows half of FSB members have increased wages of staff on the lowest incomes recently or are looking to increase their pay in the near future."
Neil Carberry, the CBI's director of employment and skills, said: "Today's figures suggest that the more positive economic outlook is beginning to flow through to the jobs market. However, overall unemployment remains high.
"It is really encouraging that today's increase in employment is almost entirely driven by a rise in full-time work and that long-term unemployment has begun to drop.
"However, it is clear that pay restraint is underpinning employment growth so we must ensure that minimum wage policy continues to reflect the wider labour market to ensure people aren't priced out of opportunities to work."
Dave Prentis, leader of Unison, said: "The figures show that full-time job opportunities are becoming increasingly rare, with a record number of workers forced to work part-time.
"When you combine this with the thousands of workers employed on zero-hours contracts and doing minimum wage jobs, it paints a very bleak picture."