It sounds like play in the bearing but could also be wear in the upright, on the OD of the inner bearing.
The only way to know for sure what's going on is to remove the hub, half shaft & bearings.
It's now seems difficult to find new rear hub bearings that don't have a small amount of axial play.
A friend of mine recently had to go through several brands of bearing before finding an acceptable pair.
Although all the bearings were specified to be of the same internal clearance, in reality they all showed different degrees of play.