Service Sector Records Shocking Contraction

January stats fan recession fears
By Kevin Spak,  Newser Staff
Posted Feb 5, 2008 11:35 AM CST
Service Sector Records Shocking Contraction
Breakfast foods and coffee drinks are advertised at the drive through of a McDonald's Corp. restaurant near the Space Needle Seattle Tuesday, Nov. 13, 2007. McDonald's laid the foundation to perk up its beverage and breakfast offerings Tuesday with plans to add upscale coffee drinks, chicken biscuit...   (Associated Press)

(Newser) – US service industries took a staggering and unexpected plunge in January, contracting at a pace not seen since the last recession. In today’s non-manufacturing report, which leaked nearly an hour early, the index plummeted from 54.4 to 41.9, far more than the 53 analysts forecast. Stocks fell broadly as a result.

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“This is a stunning fall,” one economist told Bloomberg. “If accurate, it’s dire news on the economy.” America isn’t alone: Europe’s service industries look headed the same way. They recorded their slowest growth since 2003 in a separate report released today, which one European economist called “a shocker.” (Read more recession stories.)

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