(Reuters) - Jobless rates in 49 out of the 50 U.S. states dropped in May from a year earlier, the Labor Department said on Friday, raising the stakes in a presidential contest where job creation is the top issue.
Only New York's rate rose from May 2011, to 8.6 percent. Compared with April, jobless rates were higher in 18 states, lower in 14 states and the District of Columbia, and unchanged in 18 states.
Of the 10 swing states where the fight between President Barack Obama and presumptive Republican nominee Mitt Romney is fiercest, seven had rates below the national level of 8.2 percent in May. These swing states represent nearly half the 270 electoral votes a candidate must collect to win the White House.
Jobless state survey is separate from the one carried on national level where the rate ticked up from 8.1 percent in April.
Moreover, rates were lower than the national one in almost all of the six states - New Hampshire, Pennsylvania, Ohio, Wisconsin, Iowa and Michigan - which Romney plans to visit in coming days to convince small-town voters he can improve the economy. Only Michigan had a higher rate, 8.5 percent.
Both candidates are focused on voters' skepticism of the economic recovery that officially began in 2009, but currently voters across the country consider Romney a stronger candidate than Obama on jobs and the economy.
On Thursday Obama told voters in one of the swing states, Ohio, they will "render a verdict on the debate over how to grow the economy, how to create good jobs, how to pay down our deficit."
"When you strip everything else away, that's really what this election is about," he said.
The May jobless rate in Ohio, a state with 18 electoral votes that proved crucial to President George W. Bush's win in 2004, was 7.3 percent, more than a full percentage point below the 8.8 percent rate in May 2011. After California, Ohio also added the most jobs since April, 19,600.
"Things are heading in the right direction and that's great to see, but we're far from being out of the woods," said Governor John Kasich, a Republican elected in 2010 during the "Tea Party" movement that was highly critical of the federal government. "Headwinds from Washington don't help and I remain concerned about our future progress."
The rate in swing state Pennsylvania held steady at 7.4 percent in May, the 49th straight month it has been below the national rate, according to its employment department.
Pennsylvania shed 9,900 jobs since April, the second-highest job loss after North Carolina, another swing state that lost 16,500 jobs. But it gained 27,800 jobs over the year. The state, one of many to embrace the controversial extraction process known as "fracking," added 500 jobs in mining and logging in May to reach a record high of 38,800 in that sector.
Four years ago, the story of how politics and economics connect was centered in one state: Michigan.
Throughout the 2008 primaries and general election, it had the highest jobless rate in the nation, as massive financial struggles at the three leading U.S. automobile companies took a heavy toll on factory jobs.
Since then, the state has experienced a radical turnaround, with the unemployment rate dropping over the last year. But in May its jobless rate ticked up from the 8.3 percent in April, mostly from people entering the workforce, said Rick Waclawek, director of Michigan's labor information services. The state also shed 4,000 jobs in manufacturing and 5,000 jobs total since April.
Nonetheless, the jobless rate was more than 2 percentage points below Michigan's rate of 10.6 percent in May 2011. That was the largest drop in the country, the Labor Department said.
In Wisconsin, a state recently rocked by partisan battles over a recall of its conservative governor, Scott Walker, the rate was 6.8 percent in May. That was slightly higher than 6.7 percent in April and nearly a full percentage point lower than 7.6 percent in May 2011.
The fight over job creation could be particularly tough in swing state Nevada. It flourished during the housing boom and was therefore vulnerable to the real estate collapse. The recession also kept many Americans away from entertainment cities Las Vegas and Reno.
Nevada again registered the highest unemployment rate in the nation in May, a position it has held for two years. But, alongside Michigan, it saw the steepest drop over the year - its rate fell to 11.6 percent from 13.7 percent in May 2011.
The perpetual political battleground of Florida offers the most electoral votes of any swing state, 29. Along with Mississippi, it had the second-largest drop over the year in its jobless rate, which plunged 2 percentage points to 8.6 percent.
(Additional reporting by Hilary Russ in New York and Karen Pierog in Detroit; editing by M.D. Golan)