WASHINGTON (AP) -- U.S. jobless claim applications fell to their lowest level in two months last week as layoffs remain low despite mounting evidence of a softening labor market.

The number of Americans filing for unemployment benefits for the week ending Sept. 20 fell by 14,000 to 218,000, the Labor Department reported Thursday. Analysts surveyed by the data firm FactSet had forecast 235,000 new applications.

Though layoffs remain historically low, recent government data has raised concerns about the health of the American labor market, leading the Federal Reserve to cut its key interest rate by a quarter-point last week.

The rate cut is a sign that the central bank's focus has shifted quickly from inflation to jobs as hiring has ground nearly to a halt in recent months. Lower interest rates can spur growth and hiring as individuals and businesses benefit from reduced borrowing costs. The catch is that it can also exacerbate inflation, which remains above the Fed's 2% target.

Stubborn inflation could make future interest rate decisions tricky for the Fed, whose dual mandate is to support full employment in the labor market while keeping inflation at bay.

Earlier this month, the Bureau of Labor Statistics issued a massive preliminary revision of U.S. job gains for the 12 months ending in March, revealing that the labor market has not been as strong as previously thought.

The BLS's revised figures showed that U.S. employers added 911,000 fewer jobs than originally reported in the 12 months ending in March 2025. Job gains were shown to be tapering long before President Donald Trump rolled out his far-reaching tariffs on U.S. trading partners in April.

The department issues the revisions every year, with final revisions due in February of 2026.

The updated figures came after the agency reported earlier this month that the economy generated just 22,000 jobs in August, well below the 80,000 economists were expecting.

Earlier this month, the government reported that U.S. employers advertised 7.2 million job openings at the end of July, the first time since April of 2021 that there were more unemployed Americans than job postings.

The July employment report, which showed job gains of just 73,000 and included huge downward revisions for June and May, sent financial markets spiraling and prompted Trump to fire the head of the BLS, which compiles the monthly data.

The various labor market reports have bolstered fears that Trump's erratic economic policies, including the unpredictable taxes on imports, have created so much uncertainty that businesses are reluctant to hire.

The four-week average of claims, which softens some of the weekly volatility, declined by 2,750 to 237,500.

The total number of Americans collecting unemployment benefits for the previous week of Sept. 13 inched down by 2,000 to 1.93 million.

Weekly applications for jobless benefits are considered representative of layoffs and have mostly settled in a historically low range between 200,000 and 250,000 since the U.S. began to emerge from the COVID-19 pandemic nearly four years ago.