Planned layoffs in U.S. near 5-year high

On the day after U.S. voters made history by electing Barack Obama as the country's first black president, the dire economic situation his administration will face was reinforced.

A U.S. outplacement firm said Wednesday that planned layoffs at companies in October hit levels that were almost a five-year high, with cuts centred in the financial and auto industries.

Challenger, Gray & Christmas said job cuts in October totalled 112,884, up 19 per cent from September.

Job cuts are rising across the board, said John Challenger, the CEO of the outplacement firm.

The layoff news comes just a couple of days ahead of the release of a U.S. government unemployment report on Friday. Economists are expecting to see 200,000 jobs were lost in October, pushing overall job losses to almost one million for the year.

The unemployment rate is expected to rise to 6.3 per cent from 6.1 per cent. Some analysts expect U.S. unemployment will rise to eight per cent before the situation improves.

Service sector slowdown

Also on Wednesday, a private U.S. research group, the Institute for Supply Management, said activity in the service sector fell in October.

The trade group said its services sector index fell to 44.4 in October from 50.2 in September. An index number below 50 indicates contraction in activity.

Economists polled by Thomson Reuters had been looking for a reading of 47.5.

The soft service-sector report came just two days after similar manufacturing sector showed activity for October came in its worst reading since September 1982, a time when the U.S. was in recession.