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		Home Page Wages, factory hiring fall By Barbara Hagenbaugh, USA TODAY WASHINGTON — U.S. workers' wages fell in December for the first time in more than a year as a lackluster job market gave workers little leverage when negotiating for raises or higher salaries at new jobs, the government said Monday. The data, along with other reports out Monday on the manufacturing and construction industries, added further support to the belief that although the economy is improving, the job market is still lagging. The Commerce Department said wages and salaries fell 0.3% to $5.13 trillion at a seasonally adjusted annual rate in December. That was the first decline since October 2002 and reflected wage drops in the manufacturing and service industries. Only government salaries increased late last year, the department said. Despite the wage declines, consumers continued to increase their spending in December. After adjusting for inflation, consumer spending rose 0.2% in December following a 0.6% jump in November. Wages will need to rise if the gains in consumer spending, by far the most important part of the U.S. economy, are to continue. "If consumers are going to continue to play a critical role in the economy, they are going to need some new source of funds," says Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. "They have benefited from refinancings, tax cuts and government" benefits, Naroff says. "But those are only short-term mechanisms. It is time for the private sector to pick up the slack by adding jobs." There was little hope on that front Monday, at least when it comes to the manufacturing sector, which has shed more than 3 million jobs since December 1997. The Institute for Supply Management said hiring expanded at a slower rate in January than in December, despite improvement in the manufacturing sector. The ISM said its index of factory hiring fell to 52.9% in January from 53.5% in December. The overall index rose to 63.6% last month from 63.4% in December. Numbers above 50% represent expansion, while those below suggest a contraction in activity. Norbert Orr, who heads the survey, says he has talked to manufacturers and says increases in new orders and production suggest hiring isn't far behind. "We would expect to see job creation if those things are sustained for very long," he says. Only 1,000 jobs were added economywide in December, according to government data. A look at the job market in January is scheduled to be released Friday. In another report out Monday, the Commerce Department said construction spending rose 0.4% in December as increases in construction for housing and schools outweighed declines in construction on hotels, offices and factories.   Back to Original Article: Mortgage News You Can Use   Continue with: 2 engines of growth power economy Job cut announcements jump
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