By CHRISTOPHER RUGABER, Associated Press Economics Writer

WASHINGTON (AP) — Fewer Americans sought unemployment benefits last week as employers appear to be holding onto their workers even as the economy has slowed .

Applications for unemployment benefits for the week ending Aug. 23 dropped 5,000 to 229,000, the Labor Department reported Thursday.

Measures of the job market are being closely watched on Wall Street and by the Federal Reserve as the most recent government data suggests hiring has slowed sharply since this spring. Job gains have averaged just 35,000 a month in the three months ending in July, barely one-quarter what they were a year ago.

Weekly applications for jobless benefits are seen as a proxy for layoffs and have mostly settled in a historically healthy range b

See Full Page