EU-Digest/ South Florida Sun Sentinel - US Service sector collapses -- will there be repercussions for Europe? - by Vinnee Tong
US Service sector collapses-will there be repercussions for Europe? - by Vinnee Tong
Lingering hopes that the U.S. economy might avert a recession withered Tuesday after the nation's service sector — its banks, travel companies, contractors and stores, among others — shrank for the first time in five years.Moving company Allied Van Lines filed for bankruptcy on Tuesday, saying it had fallen victim to the downturn in the housing market and its own heavy debt load. Charming Shoppes Inc. — which runs the Petite Sophisticate and Lane Bryant clothing stores — said it would cut 200 jobs and close 150 stores. "We're trying to keep that economic news really quiet because so far our visitors don't know about it," said Nicki Grossman, president of the Greater Fort Lauderdale Convention & Visitors Bureau. "We haven't seen the compression that everybody around the country is worried about." Ryan Kaminski, who runs a Mexican restaurant in Sarasota, said the squeeze he has felt as both a business owner and a consumer since last summer is growing worse. The restaurant's traffic started thinning out last summer, pulling 2007 sales down 10 percent from a year earlier, and so far this year sales are down 15 percent from a year ago.
Note EU-Digest: As fears of a U.S. recession raise the likelihood of a global economic downturn, European executives are also more pessimistic, unlike their counterparts in emerging markets in the Pacific where solid economic expansion is set to keep earnings growth intact.More than half of company chiefs surveyed in Latin America and Eastern Europe said they were "very confident" of revenue growth this year. Their optimism contrasts with just 44 percent of West European executives who were so confident, down from 52 percent a year ago.
Labels: EU Economy, US Economy, US recession
