A sharper than expected slump in a key gauge of US service sector activity suggests that a US recession may be deeper than many economists had thought, the National Association of Purchasing Management said today.
"The significant drop, particularly in business activity, new orders and order backlogs, indicates that it (the recession) will probably be somewhat deeper than what some economists had expected," said Mr Ralph Kauffman, chair of the NAPM non-manufacturing business survey committee.
Mr Kauffman spoke to reporters by teleconference after the NAPM's gauge of services sector activity fell to 40.6 in October - its lowest level in the survey's four-year history - from 50.2 in September, far worse than expectations.
He said that a drop in the survey's employment index to a record low indicated that the vast services sector would likely continue to shed jobs for some months to come.
"The outlook for employment in the non-manufacturing sector doesn't look very rosy at this point. It is going to be at least several months before we see a turnaround," he said.