The Lincoln area's unemployment rate held steady at 4.2 percent in May, while Nebraska's dropped - the only state in the country to do so.

Nebraska's rate dropped to 4.4 percent last month, down slightly from a revised 4.5 percent in April. That tied Nebraska with North Dakota for the lowest rate among states.

"The number of large layoffs and business closures that have been reported recently have declined," state Labor Commissioner Catherine D. Lang said in a news release.

Nebraska has been supported by farm businesses, while North Dakota has been helped by its oil-production and extraction work. Neither state got carried away with the housing boom, helping to keep their unemployment rates to less than half the national rate, which grew to 9.4 percent in May.

The U.S. Department of Labor said eight states hit record-high levels of unemployment in May. Michigan had the highest at 14.1 percent, which was not a record for that state.

Three of the eight states that broke records were in the West - Oregon, Nevada and California - where the regional unemployment rate topped 10 percent.

Nebraska Gov. Dave Heineman told those attending the annual Lincoln Chamber of Commerce economic development luncheon Thursday that he recently returned from a meeting of Western governors, where he heard tale after tale of rising unemployment and huge budget shortfalls.

"I talked to governors who haven't done a ribbon cutting or groundbreaking for two years," he said.

Heineman said that while Nebraska is not immune to the national recession, it is insulated somewhat, with low unemployment, a state government budget surplus and continued job creation opportunities, such as the university's Innovation Campus set to start next year at Nebraska State Fair Park in Lincoln.

Statistics show Nebraska is creating some jobs, but not enough to keep pace with losses.

Job figures from the state Department of Labor, which are not seasonally adjusted, showed Nebraska added more than 7,000 jobs in May. However, there were nearly 22,000 fewer jobs than in May 2008.

The Lincoln metropolitan statistical area, which includes Lancaster and Seward counties, also added jobs in May on a non-seasonally adjusted basis. The area had more than 1,500 more jobs than in April, but 1,700 fewer than in May 2008.

Omaha's unemployment rate fell to 4.6 percent in May from 4.7 percent in April.

The Omaha area added 3,900 jobs in May but still has nearly 10,000 fewer jobs than in May 2008.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com. The Associated Press contributed to this story.