Applications for U.S. unemployment benefits posted the smallest weekly decline since March after coronavirus cases surged and reopenings paused or reversed across the South and West.

Initial jobless claims in regular state programs totaled 1.3 million in the week ended July 11, down 10,000 from the prior period, Labor Department figures showed Thursday. Economists surveyed by Bloomberg News had forecast a larger drop, to 1.25 million initial claims.

Continuing claims -- the total number of Americans claiming ongoing unemployment benefits in state programs -- decreased to 17.3 million in the week ended July 4, compared with a median projection for a decline to 17.5 million.

Without seasonal adjustments, initial claims rose by 108,800 to 1.5 million, the first increase since early April. Of states that have seen recent increases in virus cases, California, Florida and Arizona all saw increases in initial claims on an unadjusted basis.

The figures add to signs that the labor-market recovery is stalling as public-health fears mount and state governments impose new social-distancing measures. Conditions are at risk of worsening thanks to the virus resurgence and demand that continues to be depressed in a variety of sectors: American Airlines Group Inc. and United Airlines Holdings Inc., for instance, have indicated they could lay off tens of thousands later this year.

So far, 22 states have either reversed or paused reopenings, with California recently shutting indoor dining statewide along with other actions, according to Bank of America Corp. economists.

Federal Reserve policy makers are sounding more cautious this week. Philadelphia Fed President Patrick Harker said in an interview Wednesday that his bank is revising its economic outlook in light of the virus surge and he’s a “little skeptical” July’s jobs gain will be as strong as the prior two months’.

In the week ended July 11, states reported 928,488 initial claims for Pandemic Unemployment Assistance, the federal program that extends unemployment benefits to those not typically eligible like the self-employed. That’s down from 1.05 million the prior week.

The total number of unadjusted continuing claims in all programs fell by about 430,000 to 32 million in the week ended June 27, though this figure likely reflects an overcount of reported PUA continued claims -- in some cases reflecting the number of retroactive weeks claimed rather than individual people.

This article was provided by Bloomberg News.