The number of Americans filing new claims for unemployment benefits fell to 197,000 last week, according to data released Thursday by the Labor Department.

The figure was 2,000 below the previous week’s revised level and 3,000 below the consensus forecast. New unemployment claims are closely watched as an indicator of layoffs and continue to remain near their lowest levels in decades.

The four-week moving average, which smooths out weekly fluctuations, declined to 198,000. The average has reached that level only twice since 2022 and had not been that low since 1969 before then.

The latest figures come as consumer spending remains strong despite persistent inflation and higher gasoline prices linked to the war with Iran. Business investment and corporate profits have also remained robust, while the stock market has continued reaching record highs.

Employers have generally held on to workers as the labor force grows slowly. The labor supply has been affected by the retirement of baby boomers and a slowdown in immigration following increased enforcement of immigration laws under the Trump administration.

Federal Reserve officials have also characterized the labor market as being “close to maximum employment.” The unemployment rate stands at 4.2%, matching the median projection from Fed officials for the longer-term unemployment rate consistent with their 2% inflation target.

The number of Americans continuing to receive unemployment benefits after an initial week increased by 17,000 to a seasonally adjusted 1.716 million for the week ending Sept. 26.

The combination of historically low new jobless claims and a 4.2% unemployment rate indicates that layoffs remain relatively limited even as the broader economy continues to face inflationary pressures and elevated energy costs.