(This article was updated Aug. 1.)

NEW YORK (CNN/Money) -- Months pounding the pavement, less pay offered than you had in your prior job, reduced negotiating leverage and fierce competition with those as qualified as you.

Welcome to the perils of job-hunting 2003, continued.

Despite positive economic data this week, the picture on the jobs front is still hard on the eyes whether you hail from an industry coming down from unnatural compensation highs (Wall Street) or where jobs simply are disappearing (manufacturing).

"Companies are cherry-picking. They can be very selective," said Charley Donohoe, a North Carolina-based managing consultant for human resources consulting firm DBM.

That's because employers know they're in the driver's seat thanks to dismal unemployment numbers and a lack of job creation over the past two years. After spiking to 6.4 percent in June, the U.S. unemployment rate dropped to 6.2 percent in July, but the labor force contracted further as employers cut another 44,000 jobs.

"Clients are amazed at how many good people there are," said Alan Johnson, a compensation consultant in New York who specializes in the financial services industry. And they're not all that eager to hire them, even if business improves a bit, preferring to make do with the teams they've got in place. A common refrain Johnson hears from his clients is, "We'll just work the existing people harder."

That's not great news for the job seekers already discouraged by how long it's taking them to land a gig. The median job search time in the second quarter fell to 3.4 months from a 17-year high of 4.2 months in the first quarter, according to outplacement firm Challenger Gray & Christmas. But the search time for workers over 50 continued to climb, rising to 4.8 months from 4.6 months in the first quarter.

While the economy and the labor market may have taken a dive since the manic highs of the Internet boom, the time-tested principles of landing a job still apply, Johnson said.

In order to strike the right note with prospective employers, avoid playing them a dirge about your woes. "No one wants to hire someone who's desperate," he said.

What's more, he added, highly experienced, mid-career job candidates who think their track records speak for themselves may be in for a rude shock. If they don't hone their interview skills to present that record and themselves in the best possible light, they won't get the job. "People hire people," Johnson said, not just experience.

While there are still plenty of people who can find work at or above their former salary, an increasing number of job hunters are accepting pay cuts, especially among those seeking more senior positions. Challenger found that job seekers accepting pay cuts in the second quarter rose to 23 percent from 17 percent in the first quarter.

Johnson said it used to be companies never made an offer to someone if it was below what that candidate used to earn. But now, he said, the thinking is, "if they want it, they'll take it. If not, there's someone else outside the door."

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That's not necessarily the case everywhere, however. In North Carolina, Donohoe says companies are still concerned about hiring people at lower pay scales than they're used to. The job seeker, he said, has to figure out, "How can I convince the person across the desk that I'll stay for 25 percent less?"

Once you're close to landing a job, be careful about how and what you negotiate for.

"You'll never get anything negotiating based on need," Donohoe said. "Try to identify your leverage. Figure out what you bring to the company that no one else can."

But even then, he noted, if you're applying for a non-executive job, you're not likely to have much leverage in terms of salary. You might have better luck asking for more vacation instead or more favorable hours. That's because salary ranges for non-executive positions are usually set and employers try to hire at the middle of the range.

Lastly, Donohoe tells clients to think about what their minimum pay requirements are both in terms of their budget and their psyche. The budget number is your "absolute must have," he said. Your psyche's number is the amount you need to feel you're valued for your skills and experience.

Donohoe's recommendation? If you've been out of work for an extended period of time and are financially strapped, you may need to accept what your budget requires. But if you can, try to find a job that offers you something closer to your psyche's number. That's because in the long run, he said, "if you're underpaid, you're never going to be happy."