Hawai'i's unemployment rate rose slightly to 2.6 percent in July, but the state continues to have one of the lowest unemployment rates in the country.

The seasonably adjusted rate of 2.6 percent was a 0.2 percentage point increase from June and from the same period last year, according to figures released yesterday by the state Department of Labor and Industrial Relations. The increase dropped Hawai'i from the No. 1 spot it shared with Montana in June to No. 2 in the country.

Idaho now leads the nation with a 2.3 percent unemployment rate. Nationally, the seasonally adjusted unemployment rate increased from 4.5 percent in June to 4.6 percent in July.

Although still low, July's 2.6 percent unemployment is the highest since May 2006, when the rate also was 2.6 percent. Statewide last month there were 631,500 people employed and 17,000 unemployed, for a seasonably adjusted workforce of 648,500.

The statewide unemployment rate is adjusted for seasonal variations such as summer hiring and cannot be directly compared with county numbers, which are not seasonally adjusted.

"It is encouraging to see Hawai'i sustaining a healthy, vibrant economy and a low unemployment rate," said Darwin Ching, interim labor director. "Hawai'i's employers have done an outstanding job in generating 16,200 new jobs over the last 12 months."

The private sector has accounted for 90.7 percent of the job growth since July 2006, with the largest gains in construction, education and health services, and leisure and hospitality.

Since June 2007, however, 700 jobs have been lost in the education and health services sectors. The department said employment fell by 200 jobs in private schools, while a majority of the drop in health services jobs occurred in physicians' offices, and child and elder care facilities.

The trade, transportation and utilities industries reported a loss of 400 jobs in July. Most of that decline was in the retail trade, the department said.

The hotel industry also saw a decline of 400 jobs last month and the department said that was the result of a Maui hotel releasing workers as it temporarily closed for a major renovation. The department did not name the hotel, but the Ritz-Carlton Kapalua closed July 2 for renovations.

Reach Curtis Lum at culum@honoluluadvertiser.com.