Unemployment has fallen for the fourth month in a row and more jobs are being created, especially for people over the age of 65, new figures have shown.
The jobless total fell by 65,000 to 2.58 million in the quarter to May, the lowest for almost a year, while the number of people in employment increased by 181,000 to just under 30 million, the highest for almost four years.
But the numbers claiming jobseeker's allowance jumped by 6,100 last month to 1.6 million, including an increase of 8,000 among women to 530,700, the highest figure for 17 years.
The Office for National Statistics said the increase among women was likely to have been affected by a change in eligibility rules for lone parent income support from May.
Long-term unemployment has also increased, with those out of work for more than two years up by 18,000 to 441,000, the worst figure since 1997.
The unemployment rate is now 8.1%, down by 0.2 percentage points, although the jobless total is 132,000 higher than a year ago. The biggest falls in unemployment, and increase in work, were in London, suggesting that the Olympic Games is having an impact on the figures.
Employment Minister Chris Grayling said: "This is an encouraging set of figures in what is still an incredibly difficult economic climate. Not only is unemployment falling but in overall terms there are now almost 100,000 less people on benefits since the 2010 election. We still have a long way to go but this is a step in the right direction."
Unison general secretary Dave Prentis said: "Sadly the unemployed cannot and the Government should not take comfort from these figures. The Olympic effect may give the impression of a recovery, but it is a mirage. The number of long-term unemployed is still rising, and huge numbers of women and young people are still struggling to find work."
But TUC general secretary Brendan Barber said: "These figures are excellent news. People will be relieved to see unemployment falling sharply and redundancies decreasing.
"It is also encouraging to see full-time jobs making up three-quarters of recent employment growth, and there has been a welcome increase in vacancies. The labour market is proving far more resilient than the rest of the economy."