WASHINGTON — The latest evidence of a deepening recession that's already the longest in a quarter-century came Wednesday in a pair of reports that found little relief in sight.

The U.S. service sector shrank far more than expected in November, as employment, new orders and prices plunged, hurting retailers, hotels and airlines. Meanwhile, Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.

The Institute for Supply Management's closely watched gauge of activity in service industries, where most Americans work, showed that for every company adding jobs, eight cut payrolls last month. That ratio led some economists to boost their forecasts for layoffs for November to levels not seen since the early 1980s.

"This is consistent with payrolls falling by about 500,000" for the month, said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y.. "Let's hope it is very wrong."

The ISM report said its services sector index fell to 37.3 percent in November from 44.4 percent in October. That was far below the reading of 42 percent analysts had expected. Of the 18 industries in the survey, including warehousing, real estate, restaurants and wholesale trade, only one — health care and social assistance — reported growth.

Analysts expect the nation's jobless rate, when it is announced Friday, will hit 6.8 percent, on its way to a reading that they project could be closing in on 9 percent a year from now.

State Street Corp. on Wednesday said it will cut up to 1,800 jobs, or roughly 6 percent of its global work force, between now and the end of the first quarter of next year to reduce operating costs. The Boston-based financial services company said it will reduce its staff mostly by consolidating middle and senior management ranks.

The view was equally gloomy in the Fed's beige book — the latest snapshot of business activity compiled by the Fed from its 12 regional banks. It reported that "overall economic activity weakened across all Federal Reserve districts" since October.

The beige book reported that retailers were bracing for a weak holiday shopping season, manufacturing activity had slowed sharply and bank lending was contracting as the financial sector endures its worst crisis in seven decades.

On Wall Street, investors took the latest batch of grim data in stride. The Dow Jones industrials gained 172.60 points to close at 8,591.69.

Many analysts expect the Fed, which cut interest rates by a full percentage point last month, to cut rates by a half-point at its policymakers' last meeting of the year on Dec. 16. In cutting rates, the Fed is trying to help stimulate lending and halt the economy's slide.

A panel for the National Bureau of Economic Research on Monday said the country has been stuck in a recession since last December. At 12 months, the current recession is already the longest since a severe 16-month slump in 1981-82. Many economists say this downturn will ultimately set a new record for the post-World War II period.

"I am looking for this recession to last 18 months, ending in June," said David Wyss, chief economist at Standard & Poor's in New York.

The Fed monitors productivity and wages to make sure inflation isn't getting out of hand. But analysts say worries about the deepening recession would now trump any inflation concerns in the minds of Fed policymakers.