Unemployment in Georgia rose last month to the highest rate in modern times as the Peach State continued to shed jobs and income, according to government figures released Thursday.

The Georgia Department of Labor reported that the state's jobless rate jumped to 9.7 percent in May on the way to what one economist predicts will be at least an 11 percent unemployment rate a year from now.

In a separate report released Thursday, the U.S. Bureau of Economic Analysis said personal income in Georgia last winter fell for the third consecutive quarter, although the pace of the decline appears to be slowing.

May's jobless rate across Georgia was up half a percentage point from previous month and was three-tenths of a percent above the U.S. average. The state employment agency said the number of unemployed Georgians, estimated at 463,544 in May, is up by 62 percent from a year ago.

"Georgia's record unemployment rate of 9.7 percent is a stark reminder that the road to economic recovery will be long and difficult," Georgia Labor Commissioner Michael Thurmond said in his announcement of the May figures.

University of Georgia Economist Jeff Humphreys said the current recession is hurting Georgia more than any economic downturn since the Great Depression and is likely to continue to push up Georgia's unemployment rate for the next year.

"We project unemployment will probably top 11 percent in 2010 even though we expect the recession to end later this year," Dr. Humphreys said.

The recovery may also be slower as consumers pay down debt and businesses continue to look for labor-saving economies. As a result, the University of Georgia's Selig Center for Economic Growth predicts employment in Georgia won't return to the peak reached in November 2007 until at least 2012.

"Japan lost a whole decade of growth; Georgia looks like it will loose at least a half of a decade," Dr. Humphreys said.

The housing slump is hitting Georgia harder than most states.

"We didn't have the housing price bubble, but we did have a supply bubble and Georgia is more reliant upon home construction materials than most states," Dr. Humphreys said.

In metropolitan Dalton, where most of America's carpet is produced, employment last month was down by 6,600 jobs, or 8.8 percent, from a year ago. But one bright spot for Dalton was that May's employment did show a modest gain of 200 jobs compared to April.

Statewide, employment last month was down by 136,800, or 5.6 percent, from a year ago, including a drop of 2,000 jobs in May.

In a separate report released Thursday, the federal government reported that Georgia's personal income fell by 0.4 percent in the first quarter compared with the fourth quarter of 2008. The income drop was slightly below the U.S. average decline of 0.5 percent, however, and the first quarter dip was below those reported during the previous two quarters.

Dr. Humphreys said the pace of job losses and income declines is slowing and he expects economic growth to turn positive this fall. But because unemployment tends to lag the general economy, the jobless rate won't peak until the second quarter of 2010, he said.