By Anna Yukhananov and Lisa Lambert
WASHINGTON, Jan 4 (Reuters) - Local U.S. governments cut jobs for the fourth straight month in December, including 11,000 in public schools, dragging down the nation's fragile economic recovery, jobs data showed on Friday.
Local government jobs are now at their lowest level since October 2005, with the bulk of the decline coming from layoffs of teachers and other school employees, according to the Labor Department.
For more than a year, persistent declines in public sector employment - particularly at the city, county and school district level - have stood in contrast to steady job gains in the private sector.
Jan Eberly, the U.S. Treasury assistant secretary for economic policy, said recent improvements in state budgets may start to reverse some of the declines next year.
"There is some expectation that state and local budgets will start to improve as the economy is picking up, and we're seeing improvements in many states, though not in all states," Eberly told reporters on Friday.
Overall government employment in the United States fell by 13,000 last month, the Labor Department said. Those jobs were almost all lost in public schools. Local governments shed 11,000 school jobs, and local agencies outside of schools had 2,200 more job losses.
State governments, meanwhile, added 4,000 jobs while federal government jobs fell by 3,000 in December, according to the report.
State and local government spending grew at a 0.3 percent annual rate in the third quarter, after 11 straight quarters of contraction, the Commerce Department reported last month. But many states, cities and counties are planning to keep spending flat as they continue to face uncertainty about federal funding levels and revenues.
Since August 2008, local governments have shed some 300,000 teaching and other school jobs, raising fears the layoffs could hurt students' education. Typically, schools try to avoid cutting jobs in the middle of the school year, and make most of their staffing changes in the summer.
The figures are also a worrisome sign that local budgets are still stuck in a slump. State governments have added 24,000 jobs since last December, but local governments have cut more than double that number in the past year.
The 2009 federal economic stimulus measure helped offset states' budget gaps resulting from the recession. But with the money now gone, state aid squeezed and tax revenues low, states have chipped away at their public safety and education workforces.
"(We) remain hopeful that President (Barack) Obama and the 113th Congress, as well as governors, will prioritize our students and public education and work hard to stave off further cuts," said Dennis Van Roekel, the president of the National Education Association, the largest U.S. teachers' union.