Unemployment rates fell in August in nearly 90 percent of large U.S. metro areas, mainly because more people gave up looking for work.

The Labor Department said Wednesday that unemployment rates dropped in 329 large cities, the most in four months. Rates rose in 24 cities and were unchanged in 19.

The decline in rates across America's cities was largely for a bad reason: The government only counts people as unemployed if they are actively looking for work.

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The trend closely matched the national figures. The U.S. unemployment rate fell in August to 8.1 percent from 8.3 percent, also because more people stopped searching for jobs and weren't counted.

The metro data are more volatile than the national figures because they aren't adjusted for seasonal factors, such as summer hiring.

The four cities with the biggest drops in unemployment were all in Mississippi, where the work force shrunk by 1.8 percent to 1.3 million. In Hattiesburg, the unemployment rate dropped to 7.3 percent from 9 percent. In Jackson, it fell to 6.7 percent from 8.2 percent. Pascagoula and Gulfport-Biloxi reported the next biggest declines. Yet the state barely added jobs in August.

The two cities with the biggest increases were in Washington state: Yakima's rate jumped to 10 percent from 8.2 percent, and Wenatchee's rose to 7.2 percent from 5.7 percent. Both are centers of apple production and their rates can be volatile during the harvest season.

In Denver, where President Barack Obama and GOP challenger Mitt Romney are set to debate Wednesday night, the unemployment rate fell half a percentage point to 7.7 percent. Unemployment also dropped in Las Vegas, where Obama has been preparing for the debate, although it was still painfully high at 12.3 percent. Nevada has the nation's highest unemployment rate of 12.1 percent.

There were some signs of progress in the report. The unemployment rate is below 7 percent in 123 metro areas, up from 73 a year ago. And the rate tops 10 percent in only 54 areas, about half the number compared with a year ago.

The lowest unemployment rate was in Bismarck, N.D., where it was 2.6 percent. North Dakota has benefited from a boom in oil and gas drilling.

The highest rate was in El Centro, Calif. and Yuma, Ariz. which both reported rates of 29.9 percent. Both cities have large numbers of migrant farm workers.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown