Teacher Rachel Zertuche is one of many who lost their jobs.
NEW YORK (CNNMoney) -- The state and local government jobs sector held up surprisingly well in July, but it isn't reason to cheer.
Some 39,000 government jobs were lost last month, the Labor Department said Friday. Many of them were state workers in Minnesota temporarily laid off during the 20-day state shutdown, as well as teachers from across the nation.
The loss was better than some expected, as was the Friday jobs report, which showed a gain of 117,000 jobs overall. IHS Global Insight had forecast a loss of 50,000 state and local government jobs.
But state and local workers aren't out of the woods. The next two months could continue to show big losses as governments continue to wrestle with the weak economy.
"With state and cities facing very tight budget restrictions, there is a high probability that many of the summer layoffs in the education sector will not be re-hired when the school year starts," said Greg Daco, U.S. economist for IHS Global Insight. "This could potentially lead to heavy losses on that front."
The sector could still turn in its worst quarterly performance in nearly 30 years, Daco said. Some 108,000 jobs were shed in the third quarter of 1982.
All told, the state and local government sector has lost 611,000 jobs since its peak in September 2008. Some 237,000 of those have been in education.
Teachers and other school employees are bearing the brunt of the public sector layoffs in the wake of the Great Recession. While they are often dismissed temporarily over the summer, more are getting the ax this year because of major state budget cuts to public education. And fewer are expected to get rehired in September, leading to the grim estimates for the quarter.
Rachel Zertuche of Austin, Texas, is one of those educators looking for a new job. The 6th grade social studies teacher was let go after more than six years in Austin classrooms.
While she hunts for a new position, the new mom is commuting 26 miles to work part-time in an office and taking some proofreading jobs. Her husband, a cook in an upscale restaurant, took a second job at Romano's Macaroni Grill.
Competition for teaching jobs is stiff, she said.
"There are so many of us who were laid off," said Zertuche, who has been teaching a total of 14 years. "We're all scurrying for the same positions."
Around the country, districts are sending thousands of workers to the unemployment office. In years' past, school administrators were able to meet their budgets through attrition or retirement. And many were able to recall a good number of those who were let go.
But not this year, they say. The disappearance of federal stimulus funds and the continued weakness in the economy mean fewer dollars for public education. And that means fewer employees.
Over the past two school years, New York has lost 10,000 school jobs, but 9,000 of them were through attrition or retirement, according to the New York State United Teachers union.
Now, the ax is falling on actual workers. School districts, which suffered a $1.3 billion cut in state aid for the 2011-12 year, have left 5,660 teachers, librarians, counselors and nurses out of work. Another 1,940 school professionals, including bus drivers, cafeteria workers, custodians and teachers aides, are in the same boat.
"This year, there is no room for contraction, which is why you'll see real people on unemployment lines," said Dick Ianuzzi, president of the 600,000-member union.
That means class sizes are soaring and students have fewer support services.
In California, there are now 30 to 35 kids in some classes, up from 20, said Dean Vogel, president of the California Teachers Association. Art, music and some electives are disappearing. School libraries are closed because there are no librarians to staff them.
"What it means for the learning environment is that it changes it drastically," Vogel said.
Some 4,200 teachers around the Golden State are anxiously awaiting word that there's a job for them in September.
Julia Cervantes-Espinoza, who teaches 2nd and 4th grade in the Los Angeles Unified School District, has been laid off each of the last three years. But this is the first time she ended school without being rehired. More than 2,000 teachers remain unemployed in her district.
While she's starting to apply for positions teaching English as a Second Language in community colleges, she remains hopeful that a job will open up for her. She's relatively high on the seniority list.
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