By Lucia Mutikani

WASHINGTON, Oct 1 (Reuters) - New applications for US unemployment benefits drifted close to 57-year lows last week and layoffs decreased in September, suggesting labor market stability persisted even as employers remained cautious about boosting hiring.

The report from the Labor Department on Thursday joined a raft of other data, including robust consumer spending in August, in painting a rosy picture of the economy despite ‌rising headwinds from the US-Israeli war with Iran, which has driven diesel prices to record highs. Economists said robust corporate profits growth and resilient domestic demand were shielding workers from layoffs, for now.

"At some point, ‌elevated energy costs and material prices will force firms to lay off marginal workers to protect profit margins, but there is no sign of that here," said Carl Weinberg, chief economist at High Frequency Economics.