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PHOENIX — Arizona's unemployment rate spiked by more than one-half a percentage point in December as job creation continued to lag.

The state managed to add 10,100 new jobs over November, including 4,700 in retail trade.

But the seasonally adjusted jobless rate hit 4.7 percent, up from 4.1 percent the prior month, because the Arizona businesses — especially retailers — normally would be expected to add far more workers at this time of year than that.

The Tucson and Phoenix metropolitan areas matched the increase in the state unemployment rate.

Metropolitan Tucson's jobless rate rose to 4.7 percent last month, up from 4.1 percent in November and 4 percent in December 2006. In the Phoenix metro area, unemployment rose to 4.1 percent in December from 3.5 percent in November and 3.5 percent a year ago.

Nationally, the seasonally adjusted unemployment rate rose to 5 percent from 4.7 percent.

The state's economy continues to be dragged down by the loss of another 3,100 jobs in December in the beleaguered construction industry. That comes on top of newly revised numbers showing that construction actually shed 5,000 jobs in November — 1,900 more than previously thought — meaning that the number of people working in the industry now is 24,400 fewer than a year ago.

The deteriorating jobs picture came on the heels of a report showing business leaders' confidence in the state's economy slumped, according to the Arizona Business Leaders Confidence Index.

The Business Leaders Confidence Index reading of 40.4 for the first quarter is the lowest since the survey began in mid-2003. A number below 50 indicated deteriorating conditions.

The survey, conducted in early December, measures expectations for the next quarter.

More than half of Arizona survey respondents (56.1 percent) said they expect the economy to worsen in first quarter. Their outlook for a nation's economy is just as dismal.

Nearly two-thirds of Arizona's respondents expect the national economy to worsen in the first quarter, and almost 13 percent expect things to get "much worse."

Only 7.1 percent expect the national economy to improve, and 26.8 percent think conditions will stay the same. At the end of 2007, some economists said they thought Arizona was already in a recession.