Economy Takes a Toll on Jobs

NEW YORK (CNNMoney.com) -- For American workers buffeted by layoffs and cutbacks, January was as bad as it felt, as indicated by two key employment reports released Wednesday.

The number of planned cuts announced in the month rose to the highest level in seven years, according to outplacement firm Challenger, Gray & Christmas Inc. And ADP's National Employment Report found that private-sector employers cut 522,000 positions.

Job cut announcements by U.S. employers soared to 241,749 in January, up 45% from December's 166,348 cuts, according to Challenger. That was the highest number of job cuts since January 2002.

Layoffs rose 222% - more than triple - from January 2008, when 74,986 job cuts were announced.

On the heels of the worst holiday season in decades, the retail sector was hit the hardest. Boosted in a large part by Circuit City, 53,968 job cuts were announced.

Following retail, the industrial goods industry cut 32,083 jobs last month, while the computer, pharmaceutical and aerospace industries also notched large losses.

"The variety of industries represented among the top five job-cutting sectors in January is further evidence of how far the impact of this recession has spread. Industries that at first appeared to be immune to downturns, such as computer and pharmaceutical, are now rapidly shedding workers," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.

"If there is any bright spot in the latest job-cut data, it is the fact that financial firms announced only 1,458 job cuts in January. That is the lowest one-month total for that industry since 2005," said Challenger.

Of the 23 industry categories that the Challenger report tracks, 16 reported higher job cuts in January compared to the previous month. Eleven industries announced hiring plans, led by government, computer and entertainment.

Challenger's report sets the stage for the government's monthly jobs report due Friday.

The Labor Department report is expected to show a loss of 500,000 jobs in January, down from the 524,000 reported for December, according to a consensus estimate of economists complied by Briefing.com. The unemployment rate is forecasted to rise to 7.5% from 7.2%