Applications for U.S. state unemployment insurance unexpectedly rose last week for the second consecutive week, underscoring the uneven nature of the labor market recovery.Initial claims in regular state programs increased by 16,000 to 744,000 in the week ended April 3, Labor Department data showed Thursday. Economists in a Bloomberg survey estimated 680,000 claims. The prior week’s data was revised up to 728,000. California and New York led states with the biggest increases in unadjusted claims.

The unexpected increase in claims shows the labor market still has a long way to go to recover the millions of jobs lost during the pandemic. Still, companies are poised to ramp up hiring in the coming months as vaccinations accelerate and business restrictions ease.