Jobless Claims Drop to 8-Week Low. Hiring Has Slowed, but Layoffs Aren't Rising.

The numbers: The number of Americans who applied for unemployment benefits last week fell slightly to 227,000 and touched an eight-week low, reinforcing the view that companies are reluctant to lay off workers even as they clamp down on new hiring.

New claims declined by 5,000 in the seven days that ended Aug. 31 from 232,000 in the prior week, the government said Thursday. It’s the lowest level since early July.

Economists polled by the Wall Street Journal had forecast new claims to total 225,000, based on seasonally adjusted figures.

Companies are reluctant to fire workers in light of a chronic labor shortage and the prospect of an improving economy after the Federal Reserve begins to cut interest rates. The Fed is expected to lower borrowing costs starting at their next meeting in two weeks.

Big picture: Job openings have tumbled and companies are filling fewer positions, but most people who want a job have one and unemployment is still low. That could help the economy stave off a recession, especially with the Fed ready to cut interest rates.