(Bloomberg News) Payrolls increased in 27 states in May, while the unemployment rate climbed in 18, indicating progress in the U.S. labor market remains uneven.

California led the nation with a 33,900 gain in payrolls, followed by Ohio with 19,600 more jobs, figures from the Labor Department showed today in Washington.

The economy last month added the fewest number of workers in a year, while the jobless rate rose to 8.2 percent, data showed on June 1. Faster hiring may be needed to accelerate consumer spending and trim unemployment, which remains a concern for Federal Reserve policy makers who are set to meet next week.

"The underlying pace of employment growth has softened," Bricklin Dwyer, an economist at BNP Paribas in New York, said before the report. "The risks for a weaker employment print have increased."

South Carolina showed the biggest increase in unemployment, which climbed to 9.1 percent in May from 8.8 percent the prior month. Michigan's jobless rate climbed to 8.5 percent from 8.3 percent, its first increase in a year.

Although unemployment in Nevada fell to 11.6 percent last month from 11.7 percent in April, it remained the highest in the country. Rhode Island was second, with a rate of 11 percent, followed by California at 10.8 percent.

North Dakota had the lowest unemployment in the nation, with its rate at 3 percent for a third month.

Massachusetts posted the biggest decline in joblessness, with its rate falling to 6 percent in May from 6.3 percent the prior month.

Payroll Declines

States showing the largest decreases in employment were North Carolina, Pennsylvania and Maryland.

New Jersey added 17,600 jobs in May, the third most among states and its biggest employment gain in more than seven years, as governments filled seasonal positions and a new casino opened. Its jobless rate rose to 9.2 percent, one percentage point above the U.S. level, as the state labor force expanded, Governor Chris Christie told reporters in Trenton yesterday.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, making the national figures more reliable, according to the government's Bureau of Labor Statistics.

Employers nationwide added 69,000 jobs last month, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department data showed on June 1.

Fed Meeting

A sustained rebound in hiring is needed to strengthen the pace of consumer spending, which accounts for about 70 percent of the economy. The Federal Open Market Committee, which sets the course of central bank policy, begins a two-day meeting on June 19. The group may address a cooling expansion, weaker job growth and the financial crisis in Europe.

"Will there be enough growth going forward to make material progress on the unemployment rate?" Federal Reserve Chairman Ben S. Bernanke said in testimony last week to the Joint Economic Committee. "That's the essential decision and the central question that we have who look at."

Verizon Communications Inc., the second-largest U.S. phone company, is among employers trimming expenses. It offered exit packages to 1,700 technicians and call-center workers, a move that may lead to hundreds of job cuts if enough employees don't volunteer.