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Jobless rate belies tough realityBy Sue Kirchhoff,USA TODAY WASHINGTON - The nation's unemployment rate is falling, but millions of workers are still having a tough time finding jobs - and many of those who have work are discovering their paychecks don't stretch as far as they did last year.The Labor Department said Friday that the U.S. unemployment rate fell to 5.6% in January from 5.7% in December. Businesses created 112,000 jobs in January, the biggest jump in three years - though well below the rise economists had expected given the pace of economic growth. While the report contained signs that the job market is improving, albeit slowly, it also contained telling signs of stress. Nearly 23% of the unemployed, or 1.9 million people, have been out of work for six months or more - a percentage that has increased since mid-2003, even as the economy has accelerated at a brisk pace. The mean duration of unemployment also rose slightly in January, and was nearly 20 weeks. In addition, growth in hourly earnings continues to slow and is increasing only about half as fast as a year ago, according to an analysis by Economy.com. Hourly wages, on an annual basis, are growing about 2% - about the same pace as inflation. The Labor Department numbers are in line with other recent figures showing a decline in the rate of wage growth. "Unless there is more job creation and faster wage growth, it is difficult to see how real consumer spending, 70% of the economy, can continue to sustain strong economic growth," says Steven Wood of Insight Economics. In one positive note, the length of the workweek increased, a sign that businesses may soon have to step up hiring to meet demand. Rep. George Miller, D-Calif., says Friday's report, which he termed "disappointing," underscored the need for legislation to provide special federal unemployment benefits to laid-off workers who exhaust their initial state jobless aid, which usually runs for 26 weeks. Congress has already approved two unemployment extension packages since early 2001. The most recent expired in December. The House of Representatives recently voted for an amendment to provide another six months of federal benefits to people who have used up state aid without finding a job. But it is unclear whether the amendment will pass the Senate or would receive needed funding even if it did. The National Employment Law Project, which is pushing for an unemployment extension, says long-term unemployment now is worse than during the "jobless recovery" of the 1990s and nearly as bad as the much deeper recession of the early 1980s. In Wisconsin, for example, the number of people who have run through their state benefits was at a 10-year high in December, due in part to continuing layoffs in the important manufacturing sector. But some lawmakers point out that the national unemployment rate, which has declined from 6.3% last June, is near historic averages. House Ways and Means Chairman Bill Thomas, R-Calif., says the improving unemployment figures showed that President Bush's tax cuts were working to revive the economy.
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