By Eric Morath, Wall Street Journal–

New applications for unemployment benefits in the U.S. fell slightly last week but remained between 800,000 and 900,000 for the fifth straight week, reflecting a labor-market recovery that is losing momentum.

Weekly initial claims for jobless benefits fell by 36,000 to a seasonally adjusted 837,000 in the week ended Sept. 26, the Labor Department said Thursday. In a positive sign, the number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased by 980,000 to about 11.8 million for the week ended Sept. 19. That was the lowest level since March.

The totals for unemployment applications and payments remain well above pre-pandemic peaks but are down significantly from this spring, when the coronavirus pandemic and related shutdowns caused both measures to rise to the highest levels on record back to the 1960s.

The level of new claims shows layoffs remain persistent in some industries. More companies announced job cuts this week, including American Airlines Group Inc. and United Airlines Holdings Inc., Allstate Corp. and Walt Disney Co.

“There are some companies that are really struggling, making permanent cuts that before we thought were temporary,” said Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas Inc. “A lot of the cuts now are related to economic conditions, not jobs that were paused due to Covid-19.”

Claims filed by workers last week don’t reflect the most recent corporate announcements.

“It’s a good sign that claims for state programs are coming down,” Michelle Holder, a labor economist at John Jay College in New York, said. “But the recent announcements could cause a spike in claims in the near future. Whether that translates into a spike in the unemployment rate depends on the broader recovery.”

Thursday’s data was complicated by California pausing the processing of new claims for two weeks. State officials said last month they needed to clear a backlog of nearly 600,000 Californians who have applied for benefits more than 3 weeks earlier, and about 1 million cases where individuals received payments but subsequently modified their claim and are awaiting resolution.

The U.S. Labor Department said Thursday that this week’s national report reflects California’s level during the last week before the pause. Data will be revised at a later date, the government said.