The Employment Security Commission of North Carolina said the jobless rate hit 10.1 percent in July - an increase from 9.9 percent in June.
The ESC said while the private sector gained 6,900 jobs, state government jobs decreased by 300 and local government jobs decreased by 11,800. Employment data indicates that a majority of the local government jobs were in education, including teachers.
"Job growth in North Carolina’s private sector was offset by declines in both state and local government employment," said ESC Chairman Lynn R. Holmes in a statement.
The rate also increased in June as community colleges, universities and other state government employers cut 7,600 workers that month.
The nearly $20 billion state budget took effect in July, and the spending plan included planned layoffs throughout state government.