The US service sector, which powers most of the economy, posted its worst slump on record today.
The Institute for Supply Management said its index of non-manufacturing businesses dropped to the lowest in its 11-year history, while a record low in its employment gauge raised worries about the payrolls report.
The ISM said its non-manufacturing index came in at 37.3, below October's already weak 44.4.
It was well below the level of 50 that separates expansion from contraction and much worse than the median forecast of 42.0 expected in a Reuters poll of 71 economists.
This was also consistent with global trends, with the euro zone's services economy falling deeper into recession last month than initially thought. That will add pressure on the European Central Bank to cut interest rates tomorrow by more than the 50 basis points expected.
Every major category in the ISM survey hit a record low, particularly bad news for the US, where 80% of economic activity is driven by the service sector, which includes businesses such as banks, airlines, hotels and restaurants.
The data reflected the heavy constraints on the economy as the US recession enters its second year, the worst financial crisis in a generation.
