(Bloomberg) -- Initial applications for US unemployment benefits rose last week to the highest level since August, coinciding with a recess at New York City public schools.

Initial claims increased by 22,000 to 231,000 in the week ended May 4, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 212,000 applications.

New York City public school workers such as bus drivers are allowed to apply for benefits during winter and spring breaks, which tend to boost weekly claims numbers.

Up until this latest week, total US first-time applications had been confined in a narrow 200,000-222,000 range for the last three months.

Initial claims, before adjustment for seasonal influences, rose nearly 20,000 to 209,324. That was the biggest gain since the start of the year and more than half the advance was due to a jump in New York. Claims also picked up in California, Indiana and Illinois. 

New York City public schools were on spring recess from April 22-30 and school workers are allowed to apply for benefits during winter and spring breaks, which could account for the large gain in the state’s unemployment claims.

While the rise in the headline figure “was larger than I had expected, a weekly increase was very predictable, as this is the usual pop that we routinely see in the wake of New York City school vacations,” Stephen Stanley, chief US economist at Santander US Capital Markets LLC, said in a note. “I cannot promise that the seasonally adjusted figure will fully reverse back to 210K next week, but I feel very safe in predicting a noticeable fall in the measure.”

While resilient demand is making companies reluctant to dismiss workers, the latest monthly jobs report showed a moderation in hiring. Still, the labor market has largely outperformed expectations over the last year and powered the economy. 

Federal Reserve officials are keeping a close eye on labor demand and wage growth as they debate when it might be appropriate to lower interest rates.

The four-week moving average, which helps smooth short-term fluctuations in weekly claims figures, increased to 215,000, the highest since February.

Continuing claims, a proxy for the number of people receiving unemployment benefits, rose by the most in a month to 1.79 million in the week ended April 27.

In the 20 years that preceded the Covid-19 pandemic, weekly initial applications averaged about 345,000, and continuing claims roughly 2.9 million.

--With assistance from Kristy Scheuble.

(Adds details about New York City spring break, economist’s comment)

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