Jobless rates jumped in June from the month before in more than half of the U.S. states as sinking public employment reversed the trend of steadily improving labor conditions in the first half of 2011, Labor Department data released on Friday showed.

Altogether, 28 states and the District of Columbia registered unemployment rate increases from the month before and eight states had rate decreases. From a year before, the rates dropped in 39 states and rose in eight states and the District of Columbia, Labor Department data showed.

In May, only 13 states and the District registered increases over the month and only four states had increases over the year.

The unemployment rate in Nevada rose to 12.4 percent from 12.1 percent in May, in the first rise this year. The state continued to register the highest jobless rate in the country.

Recent weakness evident at the national level may be trickling into the Silver State, said Bill Anderson, chief economist with the Nevada Department of Employment, Training and Rehabilitation, in a statement.

Nevada's jobless rate typically rises in June, but the month's increase was twice as large as the average of the last 10 years, according to the department. Retail shed 800 jobs in the state, education 400 jobs, and healthcare 400 jobs.

After Nevada, California had the highest unemployment rate of 11.8 percent. North Dakota again posted the lowest rate, 3.2 percent, followed by Nebraska, 4.1 percent.

Shrinking tax revenue in Nevada has caused the state and local governments to cut 3,600 jobs over the year, the department said, almost all at the local level.

Many states seem to be following Nevada's lead. State and local governments cut thousands of jobs in June, pushing their payrolls down to the lowest in five years, according to a Labor Department report released earlier this month.

North Carolina, where the unemployment rate jumped to 9.9 percent in June from 9.7 percent in May, lost 10,200 government jobs, according to the state's employment department. Three-fourths of the cuts were at the state level, and mostly in higher education.

Oregon's unemployment rate edged up to 9.4 percent in June from 9.3 percent in May. Since June 2010, the state has added 29,600 private sector jobs, but lost 9,100 government jobs.

The housing bust, financial crisis and recession devastated state and local tax revenues. For more than three years, states have cut spending, hiked taxes, borrowed and turned to the federal government for help in keeping their budgets balanced. Now, with few places left to find savings, they are rolling back funds for cities, counties and school districts.

On a national level, payrolls rose 18,000 in June and the unemployment rate notched up to 9.2 percent.

Michigan held the highest jobless rate in the country during the 2007-09 recession, but at the end of 2010 its employment situation improved.

While its jobless rate of 10.5 percent is lower than June 2010's rate of 12.6 percent, the state's labor market has shown no significant changes the beginning of the year, said Rick Waclawek, director of Michigan's labor bureau.

Still, total payrolls grew in 26 states and Washington, D.C., in June, with Texas gaining the most jobs, 32,000. California payrolls rose by 28,800 and Michigan payrolls by 18,000. The payrolls shrank in 24 states over the month, with Tennessee losing the most jobs, 16,900. Missouri followed, shedding 15,700 jobs, and then Virginia with 14,600 jobs.

(Reporting by Lisa Lambert, additional reporting by Michael Connor in Miami, Jim Christie in San Francisco, and Karen Pierog in Chicago; Editing by Andrew Hay)

Retail Unemployment