The number of Americans filing new claims for unemployment benefits rose last week, likely boosted by brutal winter storms in the densely populated South in mid-February.

However, the US labour market outlook is improving amid declining new Covid-19 cases. 

Initial claims for state unemployment benefits totalled a seasonally adjusted 745,000 for the week ended February 27, compared to 736,000 the previous week, the Labor Department said. 

Economists polled by Reuters had forecast 750,000 applications in the latest week. 

Stormy weather in the South left large parts of Texas without power or water for days. The deep freeze shut oil production and refineries in Texas, the biggest producer of natural gas and oil in the US. 

The labour market has lagged the acceleration in overall economic activity, which has been driven by nearly $900 billion in additional pandemic relief provided by the government in late December.

US consumer spending rebounded strongly in January as daily coronavirus cases and hospitalisations dropped sharply. 

Though the pace of decline in infections has stalled, economists believe the labour market will accelerate in the spring and through summer, noting that vaccinations were increasing daily.

A boost to hiring is also expected from President Joe Biden's $1.9 trillion recovery plan, under consideration by Congress. 

Weekly jobless claims have dropped from a record 6.867 million in March 2020 when the pandemic hit the US a little more than a year ago. 

They, however, remain above their 665,000 peak during the 2007-09 Great Recession. In a well functioning labour market, claims are normally in a 200,000 to 250,000 range. 

Last week's claims data has no bearing on February's employment report as it falls outside the period during which the government surveyed establishments and households. 

According to a Reuters poll of economists, the government will likely report tomorrow that nonfarm payrolls increased by 180,000 jobs in February after rising only 49,000 in January. 

Hopes for a pick-up in hiring last month were supported by a survey last week showing consumers' perceptions of the labour market improved in February after deteriorating in January and December. In addition, a measure of manufacturing employment increased to a two-year high in February. 

But those expectations were tempered by reports this week showing private employers hiring fewer-than-expected workers in February. Employment growth in the services industry retreated last month, with businesses reporting they were "unable to fill vacant positions with qualified applicants." 

The year-long Covid-19 pandemic is keeping some workers at home, fearful of accepting or returning to jobs that could expose them to the virus. These workers are now allowed to apply for government-funded unemployment benefits. 

The Federal Reserve's Beige Book report noted "continued difficulties attracting and retaining qualified workers" reported by many of the Fed's contacts last month, with labour shortages "most acute among low-skill occupations and skilled trade positions." 

The Fed's contacts cited the coronavirus, childcare, and unemployment benefits as factors behind the labour supply problem.