Euro-Area Services, Manufacturing Contracted in August!

• Euro-Area Services, Manufacturing Contracted in August: Economy! 
  by Simone Meier, http://www.bloomberg.com/ 
  Euro-area services and manufacturing output contracted for a seventh straight month in August, adding to signs of a deepening economic slump as European leaders struggle to contain the fiscal crisis.
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  A composite index based on a survey of purchasing managers in both industries in the 17-nation euro area rose to 46.6 from 46.5 in July, London-based Markit Economics said today in an initial estimate. A reading below 50 indicates contraction. Economists had forecast an unchanged reading, the median of 19 estimates in a Bloomberg News survey showed.
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  Europe’s economy is edging toward a recession as budget cuts from Spain to Ireland undermine consumer spending and company investment just as global demand shows signs of cooling. In China, manufacturing may be contracting at a faster pace this month, a preliminary reading showed today. A U.S. report will probably show the number of claims for jobless benefits was little changed last week, according to a Bloomberg survey.
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  “The combination of financial market tensions and fiscal austerity remains an important drag on domestic demand in the euro zone, with external demand too weak to have an offsetting impact,” Julien Manceaux, an economist at ING Group in Brussels, said in an e-mailed note. “A turnaround in sentiment can only be expected when the future of the euro zone starts to look more secure. Unfortunately, that does not seem to be happening anytime soon.”
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