Official figures show employment has reached a new record high with the UK jobless rate falling to 7.9% despite the country being mired in recession.
Upbeat figures of recent months, which came as something of a surprise, have led economists to question how the Office for National Statistics (ONS) calculates GDP growth.
The latest employment figures, also released by the ONS, showed the number claiming Jobseeker's Allowance in September fell by 4,000 to 1.56 million.
The unemployment total fell by 50,000 between June and August to reach 2.528 million, helping the unemployment rate to drop to 7.9% from 8.1% the previous month.
The employment total of 29.59 million was the highest since records began in 1971. As in previous months, the performance was largely driven by people in temporary jobs.
The ONS also reported that part-time employment increased by 125,000 between March and May to a record high of 8.13 million.
The number of people in part-time jobs because they could not find full-time work was close to a record high at 1.4 million.
Youth unemployment fell by 62,000 to 957,000, the lowest figure for over a year but only 50 thousand were shown to have taken jobs.
Self-employment increased, up by 35,000 to 4.2 million while the data also showed a rise of 13,000 in the numbers on Government-supported training and employment programmes, leaving the total at 158,000.
Separate figures on pay growth show average wage settlements are still lagging behind inflation, standing at 2.2% annually in September.
The figures were welcomed by the Government.
Minister for Employment Mark Hoban said: "It's a real landmark to see more people in work than ever before. Despite the tough economic times, the private sector continues to create jobs and our welfare reforms are encouraging people to return to work - with 170,000 fewer people on the main out-of-work benefits than in May 2010.
"The big fall in youth unemployment is particularly welcome, but we know this remains a challenge, which is why we have the £1bn Youth Contract offering nearly 500,000 work experience places, apprenticeships and wage incentives to help young people get a job."
TUC General Secretary Brendan Barber said: "These may be the best figures for some time, but we still need to do much, much better.
"There are still hundreds of thousands of young people without work, over a million people working part-time who want full time-jobs and wages are still trailing below inflation."
Bernard Brown, partner and head of business services at KPMG added: "Today's workforce will not be around forever and unless businesses across the country put plans and people in place to share expertise and experience, they will find themselves bereft of the skills which can make them competitive.
"It's well known that organisations benefit from a blend of youth and experience. Employers will do well to remember this or risk an uncertain future for individuals and organisations alike."
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