State and municipal worker layoffs are playing a bigger role in dragging down the economy, economists say, pointing to July national unemployment figures released Friday.

Public sector job losses, not counting government losses from temporary positions collecting federal census data, rose to 48,000 in July - the biggest loss in the sector in a year.

With so many states and cities facing budget crunches and running short on stimulus dollars to plug the holes, a new round of layoffs began to kick in July, when many governments begin their fiscal year.

"All of us knew that the municipal government funding is a ticking time bomb," said economist Robert Brusca of FAO Economics, who noted the impact of state worker losses on the national economy. "There's more pressure on municipalities rather than less. Putting a Band-Aid on the municipal economy makes sense."