The Government has hailed new figures showing a record number of people in work as a "real landmark", as unemployment and jobless benefit claimants fell.
Employment grew in the quarter to August by 212,000 to 29.59 million, the highest since records began in 1971, although more people are in part-time jobs than ever.
The Prime Minister acknowledged there were still "enormous economic challenges" facing the country but he said reforms were being made which could safeguard the UK's place in the world.
Labour and unions said there was still a "stubborn underlying problem" of the long-term unemployed, while a business group said the UK economy had returned to positive growth in the third quarter of 2012.
Unemployment fell by 50,000 in the latest quarter to 2.53 million, the lowest since the spring, giving a jobless rate of 7.9%.
The numbers claiming jobseeker's allowance fell by 4,000 in September to 1.57 million, the third consecutive monthly fall and the lowest total since July 2011.
The Office for National Statistics also reported that part-time employment increased by 125,000 between March and May to a record high of 8.13 million.
The number of people in part-time jobs because they could not find full-time work was close to a record high at 1.4 million.
Youth unemployment fell by 62,000 to 957,000, the lowest figure for over a year. Self-employment has also increased, up by 35,000 to 4.2 million, while the number of unpaid workers in a family business rose by 2,000 to 112,000.
David Cameron said at Prime Minister's Questions in the Commons that the Work Programme was helping to tackle the "still too high" level of long-term unemployment, adding: "We do have the measures in place to tackle this scourge."