Applications for U.S. state unemployment benefits fell more the most since late June 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.

Unadjusted initial claims in Missouri, Georgia and New York saw the biggest decreases last week. Claims rose by more than 7,200 in Louisiana, one of the states hit hardest by Hurricane Ida last week. The storm caused deaths, damage and massive power outages as it passed through the eastern U.S. 

Federal pandemic unemployment benefits ended by Sept. 6 in all states. The White House has said it will not extend jobless aid further, but states can use pandemic relief funds to provide additional assistance to unemployed workers.

The data follow last week’s employment report, which showed U.S. hiring downshifted abruptly in August with the smallest jobs gain in seven months.