The slight improvement in employment last month came after jobless rates fell in only 11 states in June from May.
From July 2012, unemployment rates decreased in 36 states and the District of Columbia and increased in nine, the department said.
For much of the last year, the majority of states have registered drops in monthly jobless rates. In May, rates dropped in 25 states and in April they fell in 40 states and Washington, D.C.
Nationally, the jobless rate fell to 7.4 percent in July, the lowest level since December 2008, largely due to people giving up on the job hunt and dropping out of the work force.
States point to the recent ebbs and flows in the labor force as a reason for their jobless rate swings, along with hemorrhaging public service employment and fluctuating education jobs.
Mississippi had the largest drop in unemployment last month, to 8.5 percent from June's 9 percent.
"The unemployment rate has been dropping since February in Mississippi. It's just been little changes," said Chief of Labor Market Information Mary Willoughby, noting that over the same time period, the state's labor force has shrunk as well.
In neighboring Alabama, where the rate dropped to 6.3 percent from 6.5 percent in June, the labor force also shrank. While manufacturers in the state gained jobs, total employment "plunged this month, dropping by 14,700," according to Alabama's labor department, with most losses inconstruction, educational and health services, leisure and government.
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