WASHINGTON: The number of Americans filing new claims for unemployment benefits fell less than expected last week and applications for the prior period were revised up, suggesting the labour market recovery had shifted into low gear amid fading fiscal stimulus.

The weekly jobless claims report from the Labour Department on Thursday, the most timely data on the economy's health, also showed nearly 30 million people were on unemployment benefits at the end of August, laying bare both the continuing economic and human devastation six months after the Covid-19 pandemic started in the United States.

Initial claims for state unemployment benefits fell 33,000 to a seasonally adjusted 860,000 for the week ended Sept. 12. Data for the prior week was revised to show 9,000 more applications received than previously reported.

Economists polled by Reuters had forecast 850,000 applications in the latest week.

Unadjusted claims dropped 75,974 to 790,021 last week. Economists prefer the unadjusted claims number given earlier difficulties adjusting the claims data for seasonal fluctuations because of the economic shock caused by the coronavirus crisis.

A total 658,737 applications were received for the government-funded pandemic unemployment assistance last week. The PUA is for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs. Altogether, 1.45 million people filed claims last week.

The claims report also showed the number of people receiving benefits after an initial week of aid declined 916,000 to 12.628 million in the week ending Sept. 5. Economists attributed the drop in the so-called continuing claims to people exhausting their eligibility for benefits.

The number of people on a government-funded program that provides up to 13 additional weeks of benefits to individuals who have exhausted their regular unemployment compensation increased 104,683 to 1.5 million in the week ending Aug. 29. A third report from the Philadelphia Fed on Thursday showed factory activity in the mid-Atlantic region moderating in September, though manufacturers remained optimistic about growth over the next six months. Reports this week showed a slowdown in retail sales and production at factories in August. A separate report from the Commerce Department on Thursday showed single-family homebuilding, which accounts for the largest share of the housing market, increased 4.1% to a seasonally adjusted annual rate of 1.021 million units in August.