Job losses and weak demand dent euro zone economy

Business growth in the euro zone slowed more than expected in October, as demand rose to the weakest degree in the last 15 months of expansion leading to job losses for the first time in almost a year.

Subdued new business inflows were the main factor stymieing output growth in the euro zone, which data firm Markit said were a result of lackluster market conditions and ongoing client uncertainty.

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Economic growth in the region was dragged down by contractions in France and Italy according to Markit's final Composite Purchasing Managers' Index, which came in at 52.1, below earlier estimates of 52.2 and barely higher than September's reading of 52.0.

New work rose at a slower pace and backlogs of work fell for the fifth month running resulting in job losses for the first time in almost a year.

Employment rose in Germany, Spain and Ireland, but fell in France and Italy.

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"The euro zone PMI makes for grim reading, painting a picture of an economy that is limping along and more likely to take a turn for the worse than spring back into life," chief Economist at Markit, Chris Williamson said.

"A fall in employment for the first time since November casts a further cloud over the outlook. Firms are often being forced to cut employment due to squeezed profits margins," he added.

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