The number of planned layoffs at U.S. firms declined 23 percent in August after rising for three straight months, with the government sector again leading the job cuts, a report showed on Wednesday.

Employers announced 51,114 planned job cuts, down from 66,414 in July, according to the report from consultants Challenger, Gray & Christmas, Inc. Planned cuts in July had marked a 16-month high.

In August, the private sector once again took a backseat to the government sector, which saw job cuts surge to the second highest monthly total this year, John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.

But July's planned job cuts were up 47 percent from August 2010, when they were at 34,768. For 2011 so far, employers have announced 363,334 cuts, somewhat better than the 374,121 cuts announced in the first eight months of 2010.

More job cuts are expected at the federal government level with pressure to cut the federal budget, the report said.

Cuts in the government sector accounted for 18,426 of the announced layoffs in August, and 105,406 for the year so far.

Meanwhile, the private sector is still being hampered by low consumer and business spending. While we do not see any indication of a sudden resurgence in private-sector job cuts, conditions definitely are not ideal for hiring, said Challenger.

The report comes two days ahead of the key U.S. jobs report. It is forecast to show nonfarm payrolls increased by 75,000 in August, according to a Reuters survey, slowing from July's 117,000 rise.

(Reporting by Leah Schnurr; Editing by Leslie Adler)