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As Employers Cut Payrolls, Average Workweek and Average Wage Decline
Friday, July 03, 2009 3:54 AM

The job market situation, in a nutshell: Reduced demand for goods and services has reduced the demand for labor, which in turn has reduced the average workweek and the average paycheck.

The statistics bureau said average hourly earnings last month of production and non-supervisory workers on nonfarm payrolls were $18.53, unchanged from May.

Over the last 12 months, average hourly earnings have grown 2.7 percent, while average weekly earnings have grown only 0.9 percent.

"This year-on-year growth rate is among the weakest on record," said Steven A. Wood, chief economist with Insight Economics.

This year, data show, average weekly earnings were $614.72 in February; they were estimated at $611.49 last month.

Wood calculated that average weekly earnings have fallen at a 0.6 percent annual rate over the last three months.

A net total of about 6 million payroll jobs have disappeared from U.S. establishments since December 2007, but the pace of job loss slowed over the last three months, leading economists to say a turnaround may have begun in May.

The June payroll cuts reinforced forecasts that have been calling for the unemployment rate to hit 10 percent or more by the end of the year.

The economic stimulus and recovery efforts have yet to make a job-gain mark.

Meanwhile, increased numbers of long-term unemployed are putting more stress on the nation's unemployment benefits and social service systems.

The number of persons who have been looking for work for 27 weeks or more grew by 433,000 last month to 4.4 million, the Labor Department said. That means about a third of all job hunters have been out of work seven months or more.

The labor report also said that 9 million workers are working part-time because they couldn't find a full-time job. That number has grown by 4.4 million in the recession.

Employment in the government sector, which has been growing, fell in June, largely because of the layoffs of temporary workers hired to prepare for the 2010 Census.

"The report from here is mostly flat -- like the rest of the country," said Bill Solon, chief executive of Spencer Reed Group, a staffing services firm based in Overland Park.

Job hunters looking for the best hiring odds should look in health care, sales, retail, customer service and technology, said Tom Musbach, senior managing editor of Yahoo! HotJobs.

"Job hunters need to focus on transferable skills," Musbach said. "Health care is a broad industry, not just doctors and nurses. The industry needs accountants, facilities managers, IT people and so forth."

To reach Diane Stafford, call 816-234-4359 or send e-mail to stafford@kcstar.com.

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