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Figures showing unemployment at its highest for nearly a decade do not show the whole picture, according to the Conservatives.
In a document called 'Labour isn't working… again', shadow work and pensions secretary Chris Grayling warned that thousands of unemployed are being kept from official figures.
The report said that "immigration has covered up Labour's failed welfare reform project", and claimed the government has not addressed the skills shortage in the workplace.
It accuses Labour "fiddling the figures", saying: "A perfect example of this is the government's claim that 'long-term unemployment has been virtually eradicated'… In fact all it has done is make it statistically impossible for someone to be long-term unemployed."
Grayling said: "Time and time again, Labour ministers boast about their employment record and the jobs they have created in the last 10 years.
"But when you read the small print of government statistics, you find a very different picture where youth unemployment is rising, the number of British people in work is falling fast and tens of thousands of unemployed people are deliberately excluded from the figures.
"This dishonest approach to employment issues just means that millions of struggling people are forgotten about."
Commenting specifically on Wednesday's Office for National Statistics figures, which show 1.72 million people out of work in the three months to July this year, Grayling said: "These figures underline the economic challenge we now face and will be a huge worry for people all around the country who are concerned about their future."