Unemployment in Britain for the three months ending in August has eased to 7.7 percent, down a tenth of a point from the rate posted a month ago, official statisticians said Wednesday.
An independent analyst, however, said gains in employment were slowing down even before the government's expected job cuts begin.
The Office for National Statistics said the rate for the June-August period was also down from 7.8 percent in the preceding three months.
The number of people claiming unemployment benefits in September was nearly 1.5 million, 5.3 percent higher than a year earlier, the agency said.
The employment rate for people aged 16 to 64 rose by two-tenths of a percent to 70.7 percent. The number of students and other economically inactive people declined by the same amount.
Most of the gains in employment were from 143,000 more part-time workers, four times the number of people added to full-time jobs, the agency said.
"The latest UK labor market data provide further evidence that the labor market recovery is faltering, even before the public sector job cuts really begin," said Vicky Redwood, economist at Capital Economics.
"We continue to think that consumer incomes are still in for a sharp squeeze over the next year or two," Redwood said.
Fabio Fois at Barclays Capital agreed that consumer incomes would be pinched, with inflation at more than 3 percent while earnings rose by 1.7 percent year-on-year in the latest reports.
He was more upbeat about employment, saying the drop in the jobless rate suggested that "labor market deterioration may have bottomed, though still at distressed levels."