WASHINGTON (PNN) - February 14, 2011 - Some of the United States weakest local governments face a real risk of default in 2011 as well as waves of layoffs that could put upward pressure on the country's jobless rate, according to a Reuters poll.

The findings from the poll published on Sunday found a majority of Wall Street professionals, including municipal bond traders and investors - 14 out of 25 - believe up to four multibillion-dollar municipal bond defaults will take place this year.

The tremors come at a time when financial markets are still mired in the Second Great Depression, and the turbulent finances of states and municipalities have been cited by top Federal Reserve officials as a key downside risk to economic expansion.

Among the investors polled, 19 of 23 thought job cuts aimed at bringing budgets into line would put noticeable upward pressure on the national unemployment rate, which despite the Labor Dept. massaging statistics to imply that the unemployment rate fell sharply to 9.0%, remained at close to 10% (though closer to 20% when the unemployed who are no longer collecting benefits are included).

Ten of those surveyed saw the jobless rate increasing more than 0.5% and three believed the impact would be over a full percentage point - a rise that could potentially be associated with hundreds of thousands of job losses.

"If the states fire the (number of) employees necessary to cut their budgets, unemployment will get worse," said Marilyn Cohen, president of Envision Capital Management in Los Angeles.