New York in July posted the largest monthly increase in private sector employment since 2005, the state Labor Department reported last week. The state added 29,000 private sector jobs last month, a 0.4% increase.

"New York State's labor market regained some traction in July," said Norman Steele, deputy director of the department's division of research and statistics.

The unemployment rate held steady at 8.2% compared to the national rate of 9.5%. The number of unemployed residents fell to 796,700 from 798,200 in a state with a population of 19.4 million.

Sectors that saw the greatest increase in jobs were construction, natural resources and mining. The sectors with the largest decrease were government, transportation, utilities and warehouse-related.

New York City's unemployment rate decreased to 9.4% from 9.5%.

"For the seventh straight month, New York City's unemployment rate has dropped and now sits once again below the nationwide rate," Mayor Michael Bloomberg said in a press release. "New York continues to weather the national recession better than most cities, but we know too many New Yorkers continue to struggle to make ends meet."

The city's update for its capital program is due out next month. Bloomberg implied that capital spending funded through debt was in part responsible for the better employment news.

"By continuing to make smart investments that help create jobs today and over the long run, we will emerge from these difficult times stronger than ever," the mayor said.

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