Jobless rate drops in 18 states

WASHINGTON (AP) - Unemployment fell in fewer states in July than in the previous three months, a sign that the pace of job growth has slowed.

The jobless rate dropped in 18 states and Washington, D.C. last month, the Labor Department said Friday. It rose in 14 states and stayed the same in 18. That's a slowdown from the past three months when unemployment fell in more than 30 states.

Nationwide, the unemployment rate remained stuck at 9.5 percent in July.

The report suggests many states are seeing less improvement in the job market than earlier this year. But there were positive signs that indicate the recovery hasn't stalled out.

Thirty-seven states saw job gains in July, an improvement from June but below the 41 states that gained jobs in May. That occurred even as many states lost temporary census jobs. Overall, 143,000 census jobs across the country ended in July. Private employers, meanwhile, added 71,000 jobs last month.

Job market improvement "is slow, but it's still moving in the right direction," said Steve Cochrane, an economist at Moody's Analytics.

There were some bright spots in the Northeast. New York and Massachusetts reported strong job gains. Massachusetts added 19,200 private-sector jobs, the largest monthly gain in more than 20 years.

The increases in Massachusetts were broad-based. They included 6,100 new jobs in hotels and restaurants, 1,600 additional jobs in retail and 2,800 new jobs in manufacturing.

The state was one of the first to see its housing sector slump, Cochrane said, and may now be exiting the downturn earlier than other states. Still, Massachusetts' unemployment rate was 9 percent in July, the same as in June.

New York added 29,000 private-sector jobs, the largest gain since April 2005. The state reported more jobs in leisure and hospitality, manufacturing, construction and professional and business services.

Several midwest states reported large job increases in manufacturing. Increasing industrial output has powered the recovery in the past year. Automakers in particular have boosted production after many car dealers cleared their lots during last year's Cash for Clunkers program.

Michigan reported a jump of 27,800 new jobs in July, most of them in manufacturing. But that figure was likely inflated by General Motors' decision last month to forgo its usual summer shutdown to retool its factories for the upcoming model year. That reduced layoffs at the company and for many of its suppliers in July.

Indiana, Illinois and Ohio also posted job gains in manufacturing.

But the boost in manufacturing jobs may fade soon, Cochrane said. Many companies have finished rebuilding inventories that were pared back during the recession. Retailers and other companies now have their inventories more in line with sales. That means that unless sales pick up, less production will be needed in the second half of this year.

Nevada posted the nation's highest unemployment rate for the third straight month, at 14.3 percent. It took the top spot from Michigan, which held it for four years, in May. Michigan's rate, the second highest, fell slightly to 13.1 percent from 13.2 percent in June. California posted the third-highest rate, at 12.3 percent, the same as the previous month.

The states with the lowest jobless rates last month were North Dakota, at 3.6 percent; South Dakota, at 4.4 percent; and Nebraska, at 4.7 percent.