updated 8/21/2009 11:48:06 AM ET 2009-08-21T15:48:06

The unemployment rate fell in 17 states and the District of Columbia last month, a positive sign even as the pain of joblessness remains widespread.

Major Market Indices

The Labor Department said Friday that the jobless rate fell in July in New York, Oregon, Minnesota and Virginia, among other states. It increased in 26 states.

While jobs remain scarce, the figures are an improvement from previous months. Only five states saw their unemployment rates drop in June. In May, the jobless rate fell in one state.

The department also said that 21 states added jobs in July, compared with 10 in June.

Still, 15 states and the District of Columbia have unemployment rates above 10 percent. Michigan's unemployment rate was 15 percent last month, down from 15.2 percent in June. That was the first time any state's jobless rate had topped 15 percent since 1984.

A New York state official credited the Obama administration's $787 billion stimulus package for the improvement. Peter Neenan said federal stimulus-funded projects helped boost employment in the construction sector.

Neenan also said there was an increase in the number of young people hired for government-funded summer jobs. New York's unemployment rate fell to 8.6 percent from 8.7 percent in June.

The other states that saw their jobless rates fall were: Connecticut, Delaware, Hawaii, Indiana, Maine, Michigan, Nebraska, South Carolina, South Dakota, Vermont, Tennessee, Washington and West Virginia.

The biggest drops were in Vermont, where the rate fell to 6.8 percent from 7.3 percent, and in Minnesota, where it dropped to 8.1 percent from 8.4 percent.

The largest job gains occurred in New York, which added 62,100 jobs; Michigan, with 38,100; Texas, with 37,900; Tennessee, with 15,600 and the District, with 13,200.

Minnesota added 10,300 jobs, the first gains in the state in almost a year, while Vermont saw its payrolls increase by 900.

Nationwide, the unemployment rate fell to 9.4 percent in July from 9.5 percent in June.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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