In the U.S., a key barometer of the strength of the service sector dropped to its lowest level since October 2001, and suggested those businesses are now contracting. In Europe, a similar indicator fell to a four-year low.
The readings fanned fears on Wall Street that the U.S. is about to tip into recession, if it hasn't already done so, particularly startling analysts who had viewed services as the nation's last bastion of economic growth.
Yesterday, the Institute for Supply Management said its index of nonmanufacturing business activity, which is based on a survey of purchasing managers in service industries, fell to 41.9 in January from 54.4 in December. That was the sharpest decline in the survey's 10-year history. (A reading below 50 indicates the industries are shrinking.)
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