George Osborne has received a welcome political boost as official figures show the number of unemployed people has fallen by 125,000 to 2.34 million.
According to the Office for National Statistics, more women are now in work than at any time since records began in 1971, at just over 14 million.
David Cameron tweeted in response: "It's good to see another fall in unemployment. Our #LongTermEconomicPlan means more people with the security of a wage & a chance in life."
The number of people employed has risen by 193,000 to 30.15 million in the last quarter of 2013, however critics expressed concern about the quality of those new jobs as 172,000 of them were self-employed.
The unemployment rate also defied expectations that it would continue to fall from 7.1% by rising to 7.2%, up 0.1% from the previous month.
Nick Palmer from the ONS said that the "main conclusion" from the figures was that "the rate at which unemployment has been falling is likely to have slowed down".
Jeremy Cook, chief economist at foreign exchange company, World First, said: "This is the first time we have seen a surprise move upwards in the figure since the beginning of 2013."
The ONS figures show that the number of people claiming jobseeker's allowance has fallen by 27,600 to 1.22 million.
However, 1.4 million people are in part-time jobs because they cannot find full-time work, a fall of 29,000 over the latest quarter but 46,000 higher than a year ago.
The number of people out of work for longer than a year has fallen by 45,000 to 845,000, while 451,000 have been unemployed for over two years, down by 7,000.
There were 917,000 unemployed 16 to 24-year-olds in the latest quarter, down by 48,000 on the previous three months. Job vacancies were up by 28,000 to 580,000, the highest since 2008.
Employment Minister Esther McVey said: "With employment continuing to increase, it's clear that the Government's long-term plan to build a stronger, more secure economy is helping businesses create jobs and get people into work.
"Record numbers of women are in work and youth unemployment continues to fall, which means more people have the security of a regular wage and can plan for their future."
Dave Prentis, general secretary of Unison, said: "Sadly, today's fall in the total number of unemployed masks the scourge of under-employment, which is growing at an alarming rate across the country.
"Under-employment is now a bitter reality for millions of struggling families across the UK. Too many people are stuck in minimum-wage jobs, on zero-hours contracts and part-time work when they are desperate to go full-time.
"Desperate because they need regular, secure employment to feed their families without having to resort to food banks, pay their bills without falling into the grip of payday lenders and decent pay to rebuild consumer confidence and grow the economy.
"Growing the economy means giving more workers across the UK a boost to their earnings."Suggest a correction