STORY: Economic activity in the euro zone shrank at its sharpest rate in more than two-and-a-half years in May...
as a war-driven surge in living costs hammered demand for services...
and pushed overall input price inflation to its highest in three-and-a-half years.
S&P Global's Flash Euro Zone Composite PMI fell to 47.5 in May from 48.8.
That's its lowest since October 2023 -- and below forecasts.
The reading marked the second consecutive month of contraction across the bloc's private sector.
A PMI below 50.0 indicates slowing activity.
Overall demand deteriorated sharply.
New orders across the private sector fell at their fastest pace in 18 months....
and services new business dropped sharply.
Factory demand, which had posted a rise in April, swung back into decline.
Services activity is the dominant driver of the euro zone economy and a key gauge of consumer demand.
It also contracted at the sharpest pace since 2021, with the Flash Services PMI falling to 46.4 in April.
The European Central Bank left interest rates unchanged late last month.
But it extensively debated a hike to combat soaring inflation and signaled both on and off the record it may pull the trigger in June.
Inflation in the common currency area held at 3.0% in April, above the ECB's 2.0% target.
