Continuing layoffs on Wall Street drove New York City's unemployment rate to 10.3 percent in August, a 16-year high that underscores the need to retrain former financial services workers for other jobs, state officials said Thursday. In the year since the Lehman Brothers investment bank collapsed and others had to be rescued from failing, the number of unemployed city residents has risen to more than 415,000, the highest total on record. The still-shrinking financial sector, which had been the main engine of employment growth in the city before the downturn, has essentially been declared to be in a state of emergency. The State Department of Labor has begun using a 'national emergency grant' of $11 million in federal funds to help those laid off on Wall Street shift into other fields, like health care and education. Emphasizing the need for such a shift, M. Patricia Smith, the state labor commissioner, said, 'Our economists don't see the financial-services sector ever coming back as strong as it was.' Smith joined Gov. David A. Paterson and Assembly Speaker Sheldon Silver at a news conference in Lower Manhattan to discuss the latest jobs data and promote the retraining program. Paterson said the latest increases in the state and city unemployment rates showed that the recession was continuing in New York. Referring to the recent pronouncement from Ben S. Bernanke, the chairman of the Federal Reserve, that the national recession is probably over, Paterson said, 'What he's saying about the national recession doesn't apply to us.' He said New York faced at least another year of 'tough sledding.' The city's unemployment rate, which rose from 9.5 percent in July, is well above the national rate of 9.7 percent. Until July, unemployment had been the same or lower in the city than it was in the country for more than 18 months. Last month, the state's unemployment rate rose to 9 percent, from 8.6 percent in July. Excluding the city, unemployment in New York State was 8 percent. Still, Mayor Michael R. Bloomberg found a bright spot in the report. 'While the job market is tight,' he said, 'the city is losing jobs at less than half the rate of the rest of the country. This is an important sign that despite the challenges, people continue to be optimistic about the city's future.' 