However, over 8 million people in the country remain "economically inactive", not taking up any job.
The unemployment rate from September to November last year fell 7,000, bringing the total number of unemployed people to 2.46 million, the first ever fall in 18 months.
The number of working people also fell during the same three months by 14,000. The overall size of the labour market shrunk to 28.92 million, the lowest ever since 1996-1997.
The number of full-time jobs fell by 113,000 from September to November 2009 as people were forced into part-time jobs.
A record total of 7.7 million Britons now work part-time, an increase of 99,000.
In what could bring good cheer to the government, the number of jobless benefits claimants dropped 15,000 to 1.6 million in December, the sharpest decline since December 2007.