(NewsNation) — The number of Americans applying for unemployment benefits dropped last week.

The latest report released by the Labor Department Thursday showed jobless claims decreased by 5,000 to 232,000. The four-week average of claims, which levels out week-to-week volatility, decreased by 4,000 to 241,500.

U.S. employers added 528,000 jobs in July, according to the Labor Department, more than double what forecasters had expected. The unemployment rate dipped to 3.5%, tying a 50-year low reached just before the coronavirus pandemic slammed the U.S. economy in early 2020.

Fed Chair Jerome Powell delivered a stark message last week: The Fed will likely impose more large interest rate hikes in the coming months and is resolutely focused on taming the highest inflation in four decades.

He also warned more explicitly than he has in the past that the Fed’s continued tightening of credit will cause pain for many households and businesses as its higher rates further slow the economy and potentially lead to job losses.

Despite a still-robust job market, the U.S. economy shrank in the first half of 2022, raising fears of a potential recession. Growth has been weakening largely as a consequence of the Federal Reserve’s aggressive interest rate hikes, which are intended to cool the economy and tame high inflation.

The Associated Press contributed to this report.