It was the highest statewide unemployment rate since March 1996, according to the Employment Development Department.

Sacramento-area unemployment went up two-tenths of a point, to 7.4 percent, largely due to a massive decline in state government jobs. Unemployment hasn't been this high in Sacramento since January 1996.

The monthly report showed the effect of the weakening economy at a time when Americans have been jolted by the crisis in the financial world and the wild fluctuations in the stock market. The private sector across California continued to sag, and state government was affected by Gov. Arnold Schwarzenegger's firing last month of some 10,000 temporary and part-time employees in an attempt to resolve the budget impasse.

Overall, the numbers spoke to the difficult economy gripping California.

"It continues to slow," said Howard Roth, chief economist at the state Department of Finance. All told, some 7,700 payroll jobs vanished across the state, the sixth straight month of job loss, he said.

About 7,800 retail jobs disappeared in California, including 500 in Sacramento. Usually the retail sector grows in August, said Diane Patterson, labor market consultant at the EDD.