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WASHINGTON (Reuters) - Jobless rates dropped in only eight states in July from the previous month and rose in 28, the Labor Department said on Monday, as employment gains sputtered.
The slight improvement in employment last month came after jobless rates fell in only 11 states in June from May.
From July 2012, unemployment rates decreased in 36 states and the District of Columbia and increased in nine, the department said.
For much of the last year, the majority of states have registered drops in monthly jobless rates. In May, rates dropped in 25 states and in April they fell in 40 states and Washington, D.C.
Nationally, the jobless rate fell to 7.4 percent in July, the lowest level since December 2008, largely due to people giving up on the job hunt and dropping out of the work force.
States point to the recent ebbs and flows in the labor force as a reason for their jobless rate swings, along with hemorrhaging public service employment and fluctuating education jobs.
Mississippi had the largest drop in unemployment last month, to 8.5 percent from June's 9 percent.
"The unemployment rate has been dropping since February in Mississippi. It's just been little changes," said Chief of Labor Market Information Mary Willoughby, noting that over the same time period, the state's labor force has shrunk as well.
In neighboring Alabama, where the rate dropped to 6.3 percent from 6.5 percent in June, the labor force also shrank. While manufacturers in the state gained jobs, total employment "plunged this month, dropping by 14,700," according to Alabama's labor department, with most losses in construction, educational and health services, leisure and government.
Conversely, Virginia pointed to an expanding labor force as the reason its jobless rate rose to 5.7 percent in July from 5.5 percent in June. At the same time, local governments' elimination of 4,500 jobs created a drag, with nonfarm employment increasing by 1,400 jobs last month, according to the Virginia employment department.
In Montana, Utah, North Dakota, Hawaii, Nevada and New Jersey, the jobless rates edged down 0.1 percent.
Nevada again had the highest jobless rate of all states in July, at 9.5 percent, followed by Illinois at 9.2 percent. North Dakota continued to have the lowest rate, at 3 percent.
New Jersey lost the most jobs, 11,800, followed by Nevada at 10,200.
The number of jobs filled in July rose in 32 states and decreased in 17 states and the District of Columbia. Employment was unchanged in South Dakota, while California gained the most jobs, with 38,100 new positions.
It was followed by Georgia, which added 30,900 jobs, although Georgia was also one of the states where the jobless rate ticked up, to 8.8 percent from 8.5 percent in June.
"The rate increased primarily because there was a significant number of new layoffs, and non-contract school employees remained unemployed because of the summer break," State Labor Commissioner Mark Butler said in a statement. "However, the vast majority of the layoffs were temporary, and the school employees are beginning to return to work."
Reporting By Lisa Lambert; Editing by Michael Connor; Editing by Dan Grebler