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PHOENIX — Arizona's jobless rate dropped last month — but not because the economy is improving.

New figures from the state Department of Commerce show the seasonally adjusted unemployment rate at 4.0 percent; that compares with 4.3 percent in January.

But Dennis Doby, the agency's senior director of research administration, said the underlying reason is that a lot of people who were unemployed in January simply stopped looking for work last month. That, technically, meant they were no longer part of the work force — and could not be counted as "unemployed."

Overall, the state added 25,300 jobs in February. But that is less than what normally would occur at this time of the year.

Arizona's mixed news came at the same time there was bad unemployment news for the country as a whole. The number of Americans filing first-time claims for unemployment insurance rose last week and the total number on benefit rolls reached the highest since August 2004, signs that firings are increasing.

Initial claims for benefits increased 22,000, to 378,000, in the week that ended March 15, more than economists forecast and the highest since the week of Jan. 26, the Labor Department said in Washington. The number of people staying on benefits rose to 2.865 million, from 2.833 million.

U.S. companies are cutting staff as the biggest housing slump in a quarter-century, tighter credit and mounting financial losses push the economy toward a recession.

"This is pretty much what it looks like heading into recession," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, said in an interview with Bloomberg Television.

Arizona's numbers are being dragged down by the loss of another 1,900 jobs in the construction industry. Frances Griego, a research economist for the Department of Commerce, said that's the biggest drop for a February since 1991.

The other big decline came in retail trade, which shed 3,500 jobs between January and February. Doby said that is directly related to lack of confidence by consumers in the economy as they both cut back on spending and try to reduce their outstanding debt.

"There's a lot of concern about prices of oil and various things," he said. "So consumers are being careful and watching how they spend their dollars."

Among the big-ticket items they're not buying, Doby said, are cars.

The Department of Commerce does not have seasonally adjusted numbers for individual counties. That's because the agency is readjusting its "benchmarks" used to determine that figure.

In pure numbers, the Phoenix-area market, which includes Maricopa and Pinal counties, added 2,700 new jobs from January to February. The change was better in Pima County, where total employment went up by 5,200.