The number of people in work declined by 58,000 to 32.75 million in the quarter, as the number of people becoming economically inactive jumped higher, the Office for National Statistics (ONS) said.
However, the slump in employment was smaller than analysts predicted, having forecast a decline of 102,000.
The quarterly decline in employment was nevertheless the heaviest since May 2015, when the level fell by 65,000.
The ONS said the falling number of people working in retail, on the back of a number of a recent major collapses and store closure programmes on the high street, significantly contributed to the slump in employment.
Despite the falling number of people in work, the number of people who were unemployed for the period also fell, dipping by 23,000 to 1.31 million.
Analysts had predicted that the rate of employment would stay flat at 3.9%, but the figures revealed a decrease to 3.8% for the period.
The fall in both employment and unemployment was driven by an increase in the number of people deemed economically inactive, which covers people who have not been seeking work or are unable to work.
The slowdown in the labour market was also highlighted by another decline in the number of UK job vacancies, with the number of roles reporting the biggest annual drop in almost 10 years.
The ninth consecutive monthly slump in vacancies saw the number of positions advertised fall by 18,000 to 800,000 as the rate of decline accelerated from the previous period.
Wage growth also saw the second consecutive month of decline as earnings remained marginally below their pre-financial crisis peak.
Total pay continued to grow much faster than inflation, but the rate of growth slowed to 3.6% from 3.8% growth reported last month. Analysts had predict growth would stay flat at 3.8%.
Statisticians said the average weekly pay, in real terms before tax, for people in the UK was £470 per week.