Europe services shrink

Bloomberg

A gauge of services activity in the 16-nation euro region fell to 44.7 from a seven-month high of 44.8 in May, London-based Markit Economics said Friday. The index is based on a survey of purchasing managers by Markit and a reading below 50 indicates contraction.

Companies across Europe have been forced to cut output and eliminate jobs to weather the global slump, prompting consumers to trim spending. Unemployment in the euro region increased to 9.5 percent in May from a revised 9.3 percent in April, the European Union statistics office said Thursday.

"Manufacturers were hit hard by de-stocking, which is now being corrected," said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas. "As consumers cut back, services will be slower to revive."