Fears of a "jobless recovery" have failed to subside as more workers went part-time after struggling to find full-time positions.
Official figures showed soaring numbers of part-timers drove the largest rise in employment for more than 21 years, helping reduce UK unemployment by 49,000 to 2.46 million in the three months to June.
The fall in unemployment was the steepest for three years and came after a 184,000 increase in the number of employed to 29 million, marking the largest quarterly hike since the three months to May 1989.
The Office for National Statistics (ONS) data revealed a welcome rise in the number of full-time employees, up 68,000 in the quarter to June.
But experts took little comfort as the figures showed the increase in employment was once again driven primarily by record numbers of part-time workers, up 115,000 to a new high of 7.84 million.
The drop in Jobseeker's Allowance claimant count gave further cause for concern as it fell by a far lower-than-expected 3,800 to 1.46 million in July, while the ONS revised down last month's quarterly fall in the claimant count, from 20,800 to 15,900.
Jim Hillage, director of research at the Institute for Employment Studies, said the labour market "clearly remains fragile".
He said: "A significant proportion of the employment growth came through temporary positions, perhaps pointing to a lack of confidence among employers, and the numbers of part-time workers unable to find full-time work continues to grow."
Economists warned that the easing in unemployment levels was likely to be only a brief respite before the Government's austerity measures take effect.
A survey of 600 employers earlier this week by the Chartered Institute of Personnel and Development found a third expected to cut jobs in the next three months - the worst figure for a year and up from one in four at the end of 2009.