U.S. applications for unemployment benefits fell to their lowest level in eight months last week as the labor market continues to show strength in the face of elevated interest rates.

U.S. applications for jobless claims fell by 20,000 to 201,000 for the week ending Sept. 16, the Labor Department reported Thursday. That’s the lowest figure since the last week of January.

Jobless claim applications are seen as representative of the number of layoffs in a given week.

The Four-Week Moving Average of Claims

The four-week moving average of claims, a less volatile measure, fell by 7,750 to 217,000.

Though the Federal Reserve opted to leave its benchmark borrowing rate alone this week, it is well into the second year of its battle to stamp out four-decade high inflation. The whopping 11 interest rate hikes since March of last year have helped to curb price growth, but the U.S. economy and labor market have held up better than most expected.

Job Growth in August

Earlier this month, the government reported that U.S. employers added a healthy 187,000 jobs in August. Though the unemployment rate ticked up to 3.8%, it’s still low by historical measures.

U.S. businesses have been adding an average of about 236,000 jobs per month this year, down from the pandemic surge of the previous two years, but still a strong number.

Job Openings in July

Recent government data also showed that job openings dropped to 8.8 million in July, the fewest since March 2021 and down from 9.2 million in June. However, those numbers remain unusually robust considering monthly job openings never topped 8 million before 2021.

Besides some layoffs early this year — mostly in the technology sector — companies have been trying to hold on to their employees.

Many businesses struggled to replenish their workforces after cutting jobs during the pandemic, and a sizable amount of the ongoing hiring likely reflects efforts by firms to catch up to elevated levels of consumer demand that emerged since the pandemic recession.

Overall, 1.66 million people were collecting unemployment benefits the week that ended Sept. 9, about 21,000 fewer than the previous week.