Applications for unemployment benefits fell to their lowest level in eight months last week as businesses continue to retain workers despite elevated interest rates meant to cool the economy and labor market.

Jobless claim applications fell by 13,000 to 198,000 for the week ending Oct. 14, the Labor Department reported today. That’s the fewest since January.

Jobless claim applications are considered a proxy for layoffs.

The four-week moving average of claims, which flattens out some of the week-to-week volatility, ticked down by 1,000 to 205,750.

Though the Federal Reserve opted to leave its benchmark borrowing rate alone at its most recent meeting, it is well into the second year of its battle to rein in persistent inflation. The central bank has raised its benchmark rate 11 times since March of 2022, with part of its goal to cool hiring and bring down wages. But the labor market has held up better than expected.

In September, employers added 336,000 jobs, easily surpassing the 227,000 for August and raising the average gain for each of the past three months to a robust 266,000. The unemployment rate remained at 3.8%, close to a half-century low.

In August, American employers posted a surprising 9.6 million job openings, up from 8.9 million in July and the first uptick in three months.

Besides some layoffs early this year — mostly in the technology sector — companies have been trying to retain workers.

Overall, 1.73 million people were collecting unemployment benefits the week that ended Oct. 7, about 29,000 more than the previous week.