The unemployment total for young people aged between 16 and 24 is now at 958,000- a rate of 20.7% - down 17,000 in the quarter.
But Labour's shadow work and pensions secretary,Liam Byrne, said "the figures speak for themselves".
"A lot of the jobs being created are temporary jobs, self employed or part time," he told the BBC. "There is insecurity in the jobs market right now,that is coming home to roost."
Analysts said the figures were in contrast to recent encouraging data suggesting a slow recovery in the UK economy.
"Following recent positive news on the economy, today's UK labour market data provides something of a reality check,"
said Martin Beck, economist at Capital ECONOMICS.
He said the fall in claimant number was one piece of positive news,but said that trend could be temporary.
With further significant public sector job losses in the pipeline and firms likely to seek to restore productivity by shedding workers, it may not be long before even this narrower measure of unemployment starts to rise too.
The British Chambers of Commerce(BCC) said the UK had a "relatively robust" labour market, and unemployment rates compared favourably with the Euro zone.
But David Kern, the BCC's chief economist, said rising unemployment underlined the need for the government to "develop a stronger growth strategy".