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WASHINGTON | Mon., Apr. 30, 2012 10:57am EDT (Reuters) — U.S. small business hiring slowed considerably in the April and employees saw a reduction in their hours, an independent survey showed on Monday, adding to signs of weakening in labor market conditions.

Businesses added 40,000 new jobs, a step back from the 75,000 positions created in March, according to Intuit, a payrolls processing firm. The average workweek for small business employees dipped 0.14%.

The pullback in hiring by small businesses is the latest indication that job growth is losing some momentum. Nonfarm employment increased 120,000 in March, the least amount in five months, with the jobless rate dropping to 8.2% — largely as some unemployed people gave up the search for work.

The government's closely monitored employment report due on Friday is expected to show that payrolls increased 170,000 in April, according to a Reuters survey. But with first-time applications for state unemployment benefits not backing away from the lofty levels scaled in recent weeks, this forecast could prove somewhat too optimistic.

The Intuit survey is based on responses from about 72,000 small businesses with fewer than 20 employees that use the Intuit Online Payroll system. It covered the period from March 24 to April 23.

The survey showed wages for small business employees edged up 0.1% or $3 to $2,680. However, that is equivalent to an annual salary of $33,200, meaning that many of the small business employees are working part-time.

(Reporting By Lucia Mutikani; Editing by Bernard Orr)

© 2011 Thomson Reuters. Click for Restrictions.

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