U.S. planned layoffs in February fall from 7-year peak

NEW YORK (Reuters) - Planned layoffs at U.S. firms fell 23 percent in February from January's seven-year peak, but remained well above long term averages as the protracted U.S. recession took a heavy toll on employment, a report showed on Wednesday.

Employers announced plans to cut 186,350 jobs in February, led by the auto industry, down from 241,749 in January, amid an economic slump that is on track to be the most protracted since World War Two, outplacement company Challenger, Gray & Christmas said on Wednesday in its monthly report.

"The decline in job cuts last month offers some hope that January was the peak and we will now see layoffs begin to fall or at least stabilize," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a statement.

But he said monthly job cuts may remain above 100,000 in the first half of the year and possibly for the rest of 2009.

Job cuts could continue to be particularly heavy in the automotive, manufacturing and financial sectors, he added.

February layoffs were led by the automotive sector, which announced 61,288 planned cuts, or about one-third of the monthly total. The next biggest sectors were industrial goods industries with 19,462, retail with 18,759, and financial with 13,550.

The Challenger data comes ahead of the government's closely watched non-farm payrolls report on Friday, which is expected to show 648,000 jobs were lost in February, according to the median of forecasts in a Reuters poll.

(Reporting by John Parry; editing by Leslie Adler)