Unemployment rates increased in more than half of the U.S. states in July as the shaky national economy took its toll on jobs, Labor Department data released on Friday showed.

Unemployment rates rose in 28 states and the District of Columbia, while they fell in nine states and were unchanged in 13, according to the data.

Nevada reported the highest jobless rate at 12.9 percent, up from 12.4 percent in June, while North Dakota reported the lowest rate at 3.3 percent, up from 3.2 percent in June.

Compared to July 2010, jobless rates were lower in 37 states and higher in seven states and the District of Columbia, the department reported.

Last month, 25 states had unemployment rates significantly lower than the national rate of 9.1 percent, while rates in eight states and the District of Columbia were measurably higher.

California's rate inched up to 12 percent in July from 11.8 percent in June, ranking the state just behind Nevada.

Ten states had statistically significant increases in their jobless rates in July compared to June. Rates were up a 0.4 percentage point in four states, including Illinois, where it climbed to 9.5 percent in July from 9.1 percent in June.

The preliminary data reflects the recent volatility in the national economy and the uncertainty both in the labor force and business community, said Illinois Department of Employment Security Director Jay Rowell in a statement.

Minnesota's rate also rose, hitting 7.2 percent in July from 6.8 percent in June, but the Minnesota Department of Employment and Economic Development said the increase was largely due to a budget impasse between the governor and legislature that led to a three-week government shutdown that sent most state workers home.

Nonfarm payroll employment rose in 31 states and the District of Columbia last month. New York reported the biggest employment increase over the month, gaining 29,400 jobs, followed by Texas with 29,300 and Michigan with 23,000, according to Labor Department data.

Payrolls shrank in 19 states, with Illinois reporting the biggest decrease over the month of 24,900, followed by Florida, which lost 22,100 jobs.

(Reporting by Karen Pierog; Editing by Andrea Ricci)

Unemployment