Applications for US state unemployment benefits fell more than forecast last week as the labor market continues toward a full recovery. 

Initial unemployment claims in regular state programs decreased to 310,000 in the week ended Sept. 4, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for a slight decrease to 335,000 new applications.

Continuing claims for state benefits fell to 2.78 million in the week ended Aug. 28.

Initial claims have declined steadily as vaccination progress and reopenings have increased demand for workers. Still, claims are higher than pre-pandemic levels, and economists expect economic growth to slow in the third quarter as stimulus spending moderates.

The recent surge in Covid-19 infections risks interrupting a steady recovery in the labor market, especially if outbreaks prompt school districts to reconsider in-person schooling.