WASHINGTON, D.C.: U.S. jobless claims remained near their lowest levels in 57 years for a fourth consecutive week, signaling that layoffs remain historically low even as hiring has slowed sharply.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 197,000 for the week ended October 3, the Labor Department said on October 8. Economists had forecast 200,000 claims.

Claims have remained below 200,000 since the second week of September. California and Illinois were the only states to report an increase in unadjusted applications of more than 1,000.

The four-week moving average of claims, a better gauge of labor market trends because it smooths out week-to-week volatility, fell 2,500 to 198,000 last week, the lowest level since early October 2022.

Though employers are holding on to workers amid strong profit growth and stock market performance, they have remained hesitant to add to headcount, making it harder for people who lose their jobs to find new opportunities. Economists have blamed the trend on uncertainty, first from tariffs and then the U.S.-Israeli war with Iran, which has pushed diesel prices to record highs and boosted prices for other commodities.

"It's still a 'low-hire, low-fire' job market," said Heather Long, chief economist at Navy Federal Credit Union. "That's great for anyone who has a job and wants to keep it, but it's tough for job seekers."

Nonfarm payrolls increased by just 29,000 jobs in September. Economists say tepid hiring and a shrinking labor pool amid retirements and an immigration crackdown are holding back job growth, leaving low layoffs to anchor the labor market.

Minutes of the Federal Reserve's September 15-16 policy meeting, published on Wednesday, showed officials "judged that labor market conditions were stable and generally viewed the labor market as close to maximum employment." The minutes also noted that policymakers "generally viewed the upside and downside risks to the labor market as broadly balanced."

The U.S. central bank last month raised its overnight benchmark interest rate by 25 basis points to the 3.75 percent-4.00 percent range, the first hike in three years, and flagged further increases in borrowing costs in the months ahead.

But the minutes revealed a growing divide over why.

The odds of another rate hike this month were reduced by underwhelming September payroll gains and cooler-than-expected inflation readings for July and August. Economists expect the Fed to raise rates in December.

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 17,000 to a seasonally adjusted 1.716 million during the week ended September 26. Continued claims had dropped to a 3-1/2-year low in the prior week.

Some economists argued that the still-low level of continued claims was masking gradual labor market weakening because some unemployed people, including recent college graduates, are ineligible for benefits because of limited or no work history. Some long-term unemployed people may also have exhausted their eligibility.

The median duration of unemployment was 11.5 weeks in September, near a 4-1/2-year high. The unemployment rate was 4.2 percent.

"An ongoing rise in unemployment among new entrants and re-entrants to the labor market, amid weak hiring, will put some further gentle upward pressure on the unemployment rate over the next few quarters," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.