Euro-area services and manufacturing output contracted more thaninitially estimated in August, adding to signs the economy hasslipped into a recession.

A composite index based on a survey of purchasing managers inboth industries in the 17-nation euro area fell to 46.3 from 46.5in July, London-based Markit Economics said today. That's below aninitial estimate of 46.6 published on Aug. 23. A reading below 50indicates contraction.

Europe's economy probably entered its first recession in threeyears in the second quarter as governments stepped up spending cutsto plug budget gaps, undermining consumer and export demand.Euro-area economic confidence dropped more than economists forecastin August and German unemployment increased, adding to signs of adeepening slump as the European Central Bank prepares for itsmonthly meeting tomorrow.

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