Europe’s troubles affect wide variety of U.S. firms

View Photo Gallery — Is the U.S. economic recovery stalling?: The Labor Department reported June 1 that the nation’s economy added only 69,000 jobs in May, bringing the unemployment rate to 8.2 percent. Here, a look at the fallout from our troubled economy and the troubles of economies overseas.

By Zachary A. Goldfarb, WashPost, Thursday, June 7, 6:10 PM

From manufacturers in the Midwest to upscale retail shops in Manhattan, a wide variety of American companies are feeling the pinch of Europe’s economic contraction, helping to hold back recovery in the United States.

Ford, the iconic U.S. car company, says that Europeans are not only buying fewer cars but also replacing fewer parts. Kraft Foods, which is behind such brands as Swedish Fish and Dentyne, says sales of candy and gum in Europe are lagging. And jeweler Tiffany & Co. says fewer European tourists are shopping at its flagship Fifth Avenue store.

Europe is suffering a financial crisis, fueled by dwindling investor confidence in the debts of such countries as Greece, Portugal, Spain and Italy and a beleaguered banking sector. In the United States, analysts are worried less about the financial system and more about the impact on companies outside Wall Street.

For companies in sectors such as food, apparel, hotels and technology, sales and profits will lag if the European crisis does not ease. The effect is direct, as Europeans buy fewer U.S. products and services, and indirect, as Europe’s crisis creates financial uncertainty in the United States and slows economic growth, leading American consumers and businesses to pull back, too.

(More here.)