Washington, Sep 18 (IANS): The number of initial unemployment claims in the US declined to 860,000 last week, indicating a continued recovery in the labour market ravaged by the Covid-19 crisis, the Labour Department reported.

In the week ending September 12, the number of Americans filing for unemployment benefits decreased by 33,000 from the previous week's upwardly revised level of 893,000, marking the fourth time in the past 26 weeks that the number has come below 1 million, Xinhua news agency quoted the Department as saying in a report on Thursday.

The number of people continuing to collect state unemployment benefits decreased by 916,000 to 12.6 million in the week ending September 5, the report showed.

The total number of people claiming benefits in all programs -- state and federal combined -- for the week ending Aug. 29, however, increased 98,456 to 29.8 million, signaling a continued significant disruption in the labour market.

State governments are facing extreme budget distress, and the extra $600 weekly unemployment benefits from the federal government expired at the end of July, but lawmakers remain deadlocked over the next round of Covid-19 relief bill.

House Democrats had unveiled a $3 trillion relief proposal in May, which didn't gain support from Republicans.

Senate Republicans unveiled a $1 trillion package in late July, but failed to advance a slimmed-down proposal last week.

Democratic leaders said recently they won't accept any package lower than $2.2 trillion.

US employers added 1.4 million jobs in August, and the unemployment rate dropped to 8.4 per cent, according to earlier data from the Bureau of Labour Statistics.

Roughly half of the 22 million jobs that were lost in March and April are yet to be recovered.