Concern grows over Europe's economic woes hurting U.S.

(CBS News) LONDON -- There's growing concern that Europe's economic woes are dragging down the American economy.

Friday's unemployment report is raising fears of another recession in the U.S.

But this time, a potential downturn isn't expected to come from the housing market.

It could originate in Britain.

The dark economic clouds gathering over Europe have many worried, especially in the U.S.

On Friday, disappointing jobs numbers in the U.S. sent stocks into a tailspin, with the Dow losing 275 points, its biggest drop since November. World markets followed, with steep losses in Europe amid growing fears of another global economic downturn, led by Europe's instability.

south, then dominated weekend headlines as speculation grew about how closely Europe's problems are tied to the U.S.

"Europe, gathered together, all of us, we're a big place. And without that, the United States would struggle to pull through on even its 1.9 percent GDP (Gross Domestic product)," says David Buik, a market analyst with BGC Partners.

With unemployment in the Eurozone at 11 percent, the highest since 1999, most of the Eurozone is in some form of financial crisis.

Greece is facing potential bankruptcy and banishment from the European Union, and more American companies are scaling back. General Electric's CEO recently said Europe will be a "smaller part of the company" going forward.

"Right at the moment, it's really getting very difficult to be confident," observes Financial Times Chief Economics Commentator Martin Wolf.

When British Prime Minister David Cameron took office in 2010, his coalition government announced sweeping austerity measures, cutting nearly half-a-million public sector jobs, raising the retirement age, and sparking massive protests.

Today, Britain is in a double-dip recession.

But there was little talk of that in London this weekend.

As Britain celebrates the queen in grand style for her Diamond Jubilee, it's a chance to put the economy aside for a few days.

But when it's all over on Wednesday morning, the reality may feel more like an extended hangover.

Asked whether, with Britain's economy dipping back into recession, there was ever a concern about the optics of the Jubilee celebration, Cameron responded, "I think the British people are very good at understanding the difficulties that a country and an economy can face when you've got this debt problems and debt issues all over the world. ... When there really is something to celebrate, we really do it properly."

Celebrating the queen is one thing; finding a reason to celebrate the economy isn't nearly as obvious.

To see Erica Hill's report, click on the video in the player above.