WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits fell slightly last week as layoffs remain low and most American workers enjoy job security.

The Labor Department said Thursday that initial jobless claims ticked down to 197,000 from a revised 199,000 the week before. The four-week average of claims, which smooths out week-to-week volatility, dropped by 2,500 to 198,000.

Claims for jobless benefits are a proxy for layoffs, and economists watch them because they can be a sign of where the job market is headed. So far this year, claims have remained at a historically low level below 220,000.

The report suggests that most companies are confident enough in the economy and their sales to hold onto their workers. At the same time, hiring has been sluggish, resulting in a “low-hire, low-fire” job market. Last month, the unemployment rate ticked up to a still-low 4.2%.