Job growth stalled in Sonoma County in August, as cuts in government employment offset sluggish growth in the private sector, the state reported Friday.

The local economy shed 700 jobs in August, compared to a year ago, the first annual reduction in jobs in 10 months, according to the state Employment Development Department.

Sonoma County's private sector has added 1,300 jobs over the past year. But that's been more than offset by a loss of 2,000 government jobs.

"Government is cutting back," said Linda Wong, a labor market consultant for the state.

Nearly one in 10 government workers have lost their jobs over the past year, trimming public sector employment to 22,500 as schools, cities, the county and other government agencies tighten their belts.

The trend could grow worse as recent state budget cuts trickle down to local government, said Robert Eyler, who heads the Center for Regional Economic Analysis at Sonoma State University.

"It could create more unemployed workers than our private sector can absorb," he said. "It's definitely going to hamper our recovery."

The unemployment rate dipped to 10 percent in August, down from a revised 10.4 percent in July. A year ago, the jobless rate stood at 10.5 percent.

The drop was caused largely by a reduction in the number of people actively looking for work. About 25,100 county residents were hunting for jobs last month, compared to 26,900 during the same period last year.

People who have stopped searching for work or left the labor force are not counted as unemployed.

"The decline we're seeing is discouraged workers," said Ben Stone, who heads Sonoma County's Economic Development Board. "They're just giving up."

While the government is cutting jobs, private sector employers are slowly adding workers. Manufacturing is up by 900 jobs over the past year, with the biggest growth in computers and electronics.

"That's a good sign," Stone said. "Those are good-paying jobs."

Construction gained 500 jobs and professional services added 600. Tourism and health care posted smaller yearly gains, but retail and financial services lost jobs.

The U.S. jobless rate was unchanged last month, at 9.1 percent.

In California, unemployment rose to 12.1 percent in August, up from 12 percent in July. California has the second-highest jobless rate in the U.S., behind Nevada's 13.4 percent.

More than 1.1 million people are receiving unemployment insurance payments in California, while another 518,000 have run out of benefits.

Marin County had the state's lowest jobless rate last month, at 7.8 percent. Marin unemployment was 8.2 percent in July.

Napa's jobless rate was 8.8 percent in August, down from 9.2 percent in July.

Mendocino County reported 10.7 percent unemployment, compared to 11.3 percent for the prior month.

Lake County's jobless rate was 16.6 percent, down from 17.5 percent in July.