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J NASHVILLE - Tennessee's unemployment rate grew slightly last month to 10.8 percent, but state officials said Thursday they were encouraged by such a minor increase.

The rate increased one-tenth of a percentage point from the May rate of 10.7 percent, the highest since November 1983. The state's rate continued to top the national rate of 9.5 percent in June.

"The fact that this is such a minor increase is encouraging as the state had experienced steeper increases in unemployment rates each month for several consecutive months," said James Neeley, commissioner of labor and workforce development.

Gov. Phil Bredesen also said Thursday that federal stimulus money created new jobs for more than 300 people in Perry County, which had the state's highest unemployment rate in May at 24.6 percent.

Updated June figures for Perry County were not yet available, but labor officials expect to see the county's unemployment rate decline.

Currently, 304 positions have been filled in Perry County, including government and private sector employment. In addition, 156 Perry County residents between the ages of 14 and 24 are working through the Summer Youth Employment Program, which ends in August.

"The effect of this effort is significant, and I appreciate the coordination of state and local governments with private employers in Perry County," Bredesen said.

More stimulus funds handled through the Department of Human Services are expected to create 50 more jobs in the county about 70 miles southwest of Nashville along the Tennessee River.

According to the Bureau of Labor Statistics, Perry County had the fifth-highest county unemployment rate in the nation after losing auto industry jobs during the past decade. In May, about 3,020 residents remained in the workforce and about 740 were unemployed, said Jeff Hentschel, a spokesman for the labor and workforce development department.

However, the stimulus-funded jobs will end in September 2010, Hentschel said.

Local government jobs in Tennessee have increased by 12,900 since June 2008, but most of those jobs are through the summer youth program. Health care and social assistance jobs increased by 10,100 over the past year. But manufacturing was down 51,000 jobs and mining and construction employment dropped by 26,600 since last year.

Leisure and hospitality jobs increased by 5,000 and health care and social assistance jobs increased by 3,100 from May to June. Government educational services lost 24,200 jobs on the local level and 4,200 on the state level over the month.

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